Preamble

The House met at half-past Nine o'clock

PRAYERS

[MR. SPEAKER in the Chair]

PETITION

Visas

Mr. Terry Davis: I wish to present a petition which has been signed by 382 residents of the city of Birmingham protesting about the racist visa regulations introduced by the Home Secretary and praying that
the Hon. Members of the House of Commons should ask the Secretary of State for Home Affairs to withdraw these restrictions which will bring distress to many British families.

To lie upon the Table.

Orders of the Day — Financial Services Bill

Lords amendments further considered.

New Clause

DATA PROTECTION

Lords amendment: No. 348, after clause 158, insert the following new clause—
An order under section 30 of the Data Protection Act 1984 (exemption from subject access provisions of data held for the purpose of discharging designated functions conferred by or under enactments relating to the regulation of financial services etc.) may designate for the purposes of that section as if they were functions conferred by or under such an enactment as is there mentioned—

(a) any functions of a recognised self-regulating organisation in connection with the admission or expulsion of members, the suspension of a person's membership or the supervision or regulation of persons carrying on investment business by virtue of membership of the organisation;
(b) any functions of a recognised professional body in connection with the issue of certificates for the purposes of Part I of this Act, the withdrawal or suspension of such certificates or the supervision or regulation of persons carrying on investment business by virtue of certification by that body;
(c) any functions of' a recognised self-regulating organisation for friendly societies in connection with the supervision or regulation of its member societies."

The Parliamentary Under-Secretary of State for Trade and Industry (Mr. Michael Howard): I beg to move, That this House doth agree with the Lords in the said amendment.
The Data Protection Act 1984 recognised that special provision had to be made to restrict access of persons to data concerning them, held in connection with the regulation of financial services, otherwise an individual could use his rights of access under the Act to find out what information about him was held by the regulators and, thus forewarned, cover his tracks and make the conclusive uncovering of the malpractice more difficult.
The new clause makes it clear that data held by self-regulating organisations and recognised professional bodies for the purpose of their regulatory functions as recognised bodies may be exempted by order under the provisions of section 30 of the Data Protection Act from its subject access provisions.

Mr. Brian Gould: I am grateful to the Minister for that somewhat brief explanation of the new clause. I think that both sides of the House would concede that this is a considerable derogation from the principles laid down in the Data Protection Act, which was a major step in advancing civil liberties in Britain. Therefore, we are obliged to look rather carefully at any substantial exception of this type which is introduced so soon after the passage of the Data Protection Act.
Labour Members' concern is increased by the fact that the new clause was introduced and passed after a brief debate in another place. I mean no criticism of their


Lordships, and I well understand the pressures under which they worked, but we should linger a little before accepting the new clause.
I can focus my anxiety by asking a specific question. I accept the general explanation and justification that the Minister has offered for the new clause, but why is it not possible simply to rely on section 28 of the Data Protection Act, which I understand already makes an exception in the case of material, the disclosure of which might be prejudicial to the detection, prosecution and conviction of a criminal offence? In other words, I think that the Minister is suggesting something which goes wider than the exceptions already claimed by the police and the Inland Revenue, and so on, which are limited to cases where a criminal offence may have been committed or be about to be committed. The Minister should offer a word of explanation about that.

Mr. Howard: With respect, the more relevant provision of the Data Protection Act is section 30. Section 28, as the hon. Member for Dagenham (Mr. Gould) has suggested, deals with exemptions from the Act in relation to prosecution, but section 30 specifically deals with the regulation of financial services and is, therefore, the most relevant section to this question. It follows from that that the principle of exemption under the Data Protection Act in relation to the regulation of financial services was recognised at the time that the Act was passed, so no new principle of any sort is involved in the amendment.
We are merely seeking to modify the application of the principle which was enshrined in that Act to the regulatory structure which is provided by the Financial Services Bill, which was not foreseen in its detail during the passage of the Data Protection Act. The purpose of the provision is to extend and modify section 30 of the Data Protection Act so that it more precisely meets the regulatory structure provided by the Bill, without in any way extending or introducing a principle other than the principle which was recognised in that Act.

Question put and agreed to.

Clause 159

OCCUPATIONAL PENSION SCHEMES

Lords amendment: No. 349, leave out clause 159.

Mr. Howard: I beg to move, That this House doth agree with the Lords in the said amendment.

Mr. Speaker: With this it will be convenient to take Lords amendment No. 350.

Mr. Howard: This amendment reflects the result of consultations on the Bill's provisions in relation to occupational pension schemes. The reference in the existing clause 159 to management "through" an authorised person has caused some uncertainty, and some have questioned the position of trustees of occupational pension schemes. The new clause clarifies the requirement to be authorised. A person, such as a trustee, who is responsible for the management of investments held for the purposes of an occupational pension scheme will not be required to be authorised if he delegates day-to-day management of those assets to an authorised, exempted or overseas person. This does not mean that he would have to distance himself entirely from the management of the

assets. He would still be able to take what might be called strategic decisions, for example, about the proportion of the assets which should constitute investments of particular kinds, or the desired balance between growth and income and, indeed, his responsibilities as a trustee might require him to do so. Similarly, a trustee would not need to be authorised simply because the person managing the scheme's assets was required to consult him from time to time in particular circumstances, for example, where there was a takeover bid, where the manager had a conflict of interests, or where the transaction in question was particularly large. But a trustee would be required to be authorised if he regularly exercised discretion as to the sale or purchase of a particular investment.
The new clause also makes it clear that the requirement to be authorised in subsection (1) overrides, where necessary, the exclusion for trustees in paragraph 20 of schedule 1. If a trustee actively manages the assets of the pension scheme, he will have to be authorised even if he satisfies the conditions set out in paragraph 20.
Subsection (3) allows the Secretary of State to exclude certain managers of certain types of occupational pension schemes from the scope of subsection (1), and hence from the requirement to be authorised. It has been suggested to us, particularly in the context of small self-administered pension schemes approved by the Inland Revenue, that the provisions of the clause are inappropriate to some types of small schemes because they are effectively under the control of their members. I cannot at this stage say precisely which classes of scheme will be excluded under this provision. Clearly, approved, small, self-administered schemes are strong contenders, although the Government will wish to consider carefully whether all such schemes or only classes of them should be excluded. We should also want to consider whether the pensioner trustees of such schemes should continue to be required to be authorised. There may also be other classes of scheme in respect of which the power should be exercised.
I should stress that my right hon. Friend the Secretary of State for Social Services will need to consider carefully whether a scheme which is not managed by an authorised or exempted person should be able to contract out of the state earnings-related pension scheme under the new arrangements to be introduced under the Social Security Bill.

Question put and agreed to.

Lords amendments Nos. 350 and 351 agreed to.

Lords amendment: No. 352, in page 129, line 39, leave out from "authorised" to end of line 40 and insert
or exempted person in the course or for the purpose of engaging in any activity falling within paragraph 12 of Schedule 1 to this Act with or on behalf of the person by whom or on whose behalf the deposit is made or any activity falling within paragraph 13, 14 or 16 of that Schedule on behalf of that person.
(2) Subsection (1) above applies to an exempted person only if the activity is one in respect of which he is exempt; and for the purposes of that subsection the paragraphs of Schedule 1 there mentioned shall be construed without reference to Parts III and IV of that Schedule.
(3) This secion is without prejudice to any exemption from the said Act of 1979 which applies to an authorised or exempted person apart from this section.

Mr. Howard: I beg to move, That this House doth agree with the Lords in the said amendment.
It is clearly essential that where the carrying on of investment business necessarily involves what, given the broad definition in the Banking Act 1979, must also be


regarded as the acceptance of a deposit, it must be the regime to be introduced under this Bill and not the inappropriate regime of the Banking Act which applies. However, the clause as originally drafted arguably went too wide, in that it could have permitted authorised persons to finance their business by means of an otherwise unconnected deposit-taking business without seeking the proper authority under the Banking Act. While it would have been possible to deal with this matter in the rules governing authorised persons, we think that it would be preferable to limit the exemption from the Banking Act on the face of the Bill. That is the first object of the amendment.
The second object of the amendment is to ensure that exempted persons, who will need to accept deposits for the same reasons as authorised persons, will also benefit from a similar exemption from the Banking Act.

Question put and agreed to.

Lords amendment: No. 353, in page 131, line 35, leave out from "In" to
(duty" in line 36 and insert "paragraph (4) of Article 195 of the Companies (Northern Ireland) Order 1986".

Mr. Howard: I beg to move, That this House doth agree with the Lords in the said amendment.

Mr. Speaker: With this it will be convenient to take Lords amendments Nos. 354 to 365, 371 to 373, and 376.

Mr. Howard: These are technical amendments to adapt the Bill to take account of the different company law provisions in Northern Ireland. Amendment No. 376 is also a technical amendment. An amendment was introduced earlier to provide a definition of the exempt interests of recognised market-makers which will not be notifiable under sections 198 to 210 of the Companies Act 1985, but the corresponding provision for Northern Ireland was omitted. This amendment makes good that omission.

Question put and agreed to.

Lords amendments Nos. 354 to 365 agreed to.

Lords amendment: No. 366, in page 132, line 34, leave out "or for the benefit of" and insert
, and involving the acquisition of beneficial ownership of those shares by,".

Mr. Howard: I beg to move, That this House doth agree with the Lords in the said amendment.

Mr. Speaker: With this it will be convenient to take Lords amendments Nos. 367 and 368.

Mr. Howard: These amendments are technical. The first closes a potential loophole which might have allowed assistance to be provided for purposes other than the acquisition of beneficial ownership of shares. The second modifies the definition of "connected company" in subsection (3). The third brings Northern Ireland company law into line with the Companies Act as amended by this clause.

Question put and agreed to.

Lords amendments Nos. 367 to 377 agreed to.

Clause 171

SERVICE OF NOTICES

Lords amendment: No. 378, in page 139, line 26, at end insert
, the Chief Registrar of Friendly Societies or the Registrar of Friendly Societies for Northern Ireland".

Mr. Howard: I beg to move, That this House doth agree with the Lords in the said amendment.
This amendment adds the Chief Registrar of Friendly Societies and his Northern Ireland equivalent to the Secretary of State as persons who are excluded from the provisions of clause 171 on the way in which notices may be served under the Bill.
There are separate statutory provisions for serving notices, not only on the Secretary of State, who is consequently excluded from the scope of clause 171, but on the Chief Registrar of Friendly Societies or the Registrar of Friendly Societies for Northern Ireland. This amendment corrects that omission from an earlier version of the Bill.

Question put and agreed to.

Lords amendments Nos. 379 to 381 agreed to.

New Clause

PUBLICATION OF INFORMATION AND ADVICE

Lords amendment: No. 382, after clause 172, insert the following new clause:—

(1) The Secretary of State may publish information or give advice, or arrange for the publication of information or the giving of advice, in such form and manner as he considers appropriate with respect to—

(a) the operation of this Act and the rules and regulations made under it, including in particular the rights of investors, the duties of authorised persons and the steps to be taken for enforcing those rights or complying with those duties;
(b) any matters relating to the functions of the Secretary of State under this Act or any such rules or regulations;
(c) any other matters about which it appears to him to be desirable to publish information or give advice for the protection of investors or any class of investors.

(2) The Secretary of State may offer for sale copies of information published under this section and may, if he thinks fit, make a reasonable charge for advice given under this section at any person's request.
(3) This section shall not be construed as authorising the disclosure of restricted information within the meaning of section 149 above in any case in which it could not be disclosed apart from the provisions of this section.
(4) The functions to which section 96 above applies shall include the functions of the Secretary of State under this section."

Mr. Howard: I beg to move, That this House doth agree with the Lords in the said amendment.

Mr. Deputy Speaker (Mr. Harold Walker): With this it will be convenient to take Lords amendments Nos. 506 and 520. I must inform the House that amendment No. 382 involves privilege.

Mr. Howard: The new clause has been prepared in accordance with an undertaking given to a noble Lord on the Opposition Benches. It confers on the Secretary of State the function of publishing information and giving advice about the way in which the Bill operates and other specified matters. The functions will be transferable to the designated agency in the normal way.

Mr. William Cash: This is an extremely helpful provision and I am grateful to my hon. and learned Friend the Minister for explaining how it came about. I had some misgivings when I heard that it arose from an undertaking given to a Member of the Opposition, but in view of the good relationship that we built up in Committee, it would be unfair to dwell on that point.
Will my hon. and learned Friend consider encouraging consultation—which I understand will be with the SIB in this case— between those who will be giving the information and those who will be affected by it? If there is consultation about the manner in which information and advice are to be given before the rules are drawn up, they are more likely to be readily understood by the public, and that is the purpose of the exercise. In practice the provision will prove important, and the more consultation there is before the information and advice are drawn up, the better.

Mr. Gould: I endorse the comments that have been made about the value of the amendment, and I thank the Minister for introducing it. Perhaps, not surprisingly, the provenance of the new clause adds to its charm.

Mr. Howard: As consultation has been our watchword throughout the passage of this legislation, it would be churlish to do anything other than to respond in the most positive fashion to the invitation extended to me by my hon. Friend the Member for Stafford (Mr. Cash). I am delighted that his initation has been endorsed by the hon. Member for Dagenham (Mr. Gould), and I agree with what they have said.

Question put and agreed to. [Special Entry.]

Lords amendments Nos. 383 to 390 agreed to.

Clause 173

INTERPRETATION

Lords amendment: No. 391, in page 143, line 32, after "cent." insert "or more"

Mr. Howard: I beg to move, That this House doth agree with the Lords in the said amendment.
The amendment corrects a defect in the definition of "comptroller" for the purposes of the Bill.

Question put and agreed to.

New Clause

GIBRALTAR

Lords amendment: No. 392, after clause 173 insert the following new clause—
.—(1) Subject to the provisions of this section, section 30, 53(1)(c), 78 and 111(2)(c) and (d) above shall apply as if Gibraltar were a member State.
(2) References in those provisions to a national of a member State shall, in relation to Gibraltar, be construed as references to a British Dependent Territories citizen or a body incorporated in Gibraltar.
(3) In the case of a collective investment scheme constituted in Gibraltar the reference in subsection (3)(a) of section 78 above to a relevant community instrument shall be taken as a reference to any Community instrument the object of which is the co-ordination or approximation of the laws, regulations or administrative provisions of member States relating to collective investment schemes of a kind which satisfy the requirements prescribed for the purposes of that section.
(4) The Secretary of State may by regulations make such provision as appears to him to be necessary or expedient to secure—


(a) that he may give notice under subsection (2) of section 78 above on grounds relating to the law of Gibraltar; and
(b) that this Act applies as if a scheme which is constituted in a member State other than the United Kingdom and recognised in Gibraltar under provisions which appear to the Secretary of State to give effect to the provisions of a relevant Community instrument were a scheme recognised under that section.".

Mr. Howard: I beg to move, That this House doth agree with the Lords in the said amendment.
The new clause makes provision for investment businesses in Gibraltar. It treats Gibraltar as if it were a member state of the EC in its own right. We believe that such a course is the only one that is consistent both with Gibraltar's position under the treaty of accession, since for financial services Gibraltar is effectively part of the EC, and with Gibraltar's constitution, under which it enacts its own legislation.

Mr. Gould: Simple curiosity leads me to ask whether any attempt was made to consult the Spanish authorities about this.

Mr. Cash: I wanted to ask that question, too.

Mr. Howard: The answer is no.

Question put and agreed to.

Schedule 1

INVESTMENTS AND INVESTMENT BUSINESS

Lords amendment: No. 393, in page 146, line 7, leave out paragraph 1 and insert
Shares and stock in the share capital of a company.

Mr. Howard: I beg to move, That this House doth agree with the Lords in the said amendment.

Mr. Deputy Speaker: With this it will be convenient to discuss Lords amendments Nos. 394 to 401, 405 to 409, 412, 414 to 419, and 421 to 426.

Mr. Howard: This rather large group of amendments contains several detailed amendments to the definition of investment business in schedule 1. They have all been made in response to concerns expressed about the wording of the schedule. Indeed, some of the amendments fulfil Government commitments made in the House when particular concerns were expressed.
I commend the amendments to the House.

Mr. Tim Smith: What is the difference between shares in the share capital of a company and stock in a company, and shares and stock in the share capital of a company?

Mr. Howard: I am not sure that I can give a sufficiently authoritative exposition of that distinction immediately. As I am sure that my hon. Friend would not want any answer that was not entirely authoritative, I shall reply to him as soon as I am in a position to do so.

Mr. Laurie Pavitt: Why did the drafting on that point result in so much confusion? Is the same true of other provisions, in that the way in which they were worded has led to this large block of amendments?

Mr. Howard: In the Bill as originally drafted, we adopted definitions which we thought were appropriate, but we always recognised that it would be necessary to


consult further—consultation preceded publication of the Bill—with those engaged in day-to-day dealings with these various instruments in the markets, who are in the best position to know exactly how the definitions formulated in the legislation should apply to their activities. The Bill is an excellent example of the way in which we are prepared to learn from those who have the knowledge that cannot possibly repose within the confines of Government, and to respond constructively to representations made so as to ensure that the definitions in the legislation correspond as effectively as possible with the realities of practices in the market place. That is why these amendments have been introduced, and I make no apology for them.

Mr. Gould: Nevertheless, my hon. Friend the Member for Brent, South (Mr. Pavitt) has made a serious and valuable point which is very much in line with some of the opening remarks made by hon. Members yesterday.
The Bill is the culmination of a long process. The Gower report was commissioned in 1981, I think; there was then a long inquiry by professor Gower, followed by a White Paper and then the Bill. The Bill has now been discussed for nine or 10 months. Yet the House is still struggling to deal with so many late amendments. Why is that? I entirely accept that these are essentially technical matters, drafting problems, and so on, and that the Government have striven hard to get them right. Yet despite all the preparatory work which has gone on for so long we still face this difficult situation. I do not entirely blame the Government, because they have done all that they could, but why have City interests come forward so late in the day squealing, as it were, that they would be hurt by a badly drafted provision? Why were they not brought in or induced to make those points much earlier, when the House and the Committee could have considered them properly?

Mr. Howard: I am grateful to the hon. Gentleman for giving me another opportunity to expand on that point. It is not a question of people not having been brought in or encouraged to comment earlier. Extensive consultation took place with affected interests. As I shall demonstrate, it is not only the City which has come forward late with suggestions. Extensive consultations took place during the preparatory stages of the legislation, before publication of the Bill. The Bill was published last December, so there was every opportunity for affected interests to come forward. I am not in a position to say why, in many cases, they came forward later rather than earlier, but it was not for lack of any contact, invitation or encouragement on the part of the Department and its officials.
A particularly good example is provided by the question asked by my hon. Friend the Member for Beaconsfield (Mr. Smith), to which I can now give a more authoritative answer. I do not know whether he will find it particularly illuminating, but it is a good example of the consultation that has taken place. We do not think that amendment No. 393 makes any significant difference to the text of the original Bill, but the Law Society came along at a late stage and said that it believed that the wording provided in amendment No. 393 was clearer than the original wording. Opposition Members paid tribute to the Law Society yesterday and it is sensible to pay serious regard to the Law Society's representations. When the Law Society comes to us, at however late a stage, and

suggests that an alternative formula provides greater clarity, even if that extra clarity is not immediately obvious to us, and as no detriment could be caused, we try to respond favourably and positively. That is why amendment No. 393 has been proposed. It is a good and typical example of the way in which the consultation processes work.

10 am

Mr. Gould: rose—

Mr. Deputy Speaker: I remind the hon. Member for Dagenham (Mr. Gould) that he can make a further contribution only with the leave of the House. I hope that we are not to have a protracted debate about consultation methods or their absence.

Mr. Gould: I was hoping to intervene in the Minister's speech. However, I ask the leave of the House. I was interested in the Minister's concluding remarks. Does he accept that we are talking about a novel principle for legislation? Apparently one can add words to a Bill, however meaningless they may seem, provided that they do not actually do anything.

Mr. Howard: That is not quite what I said. I did not suggest that the words to be added to the Bill are meaningless. I said that the extent of the additional clarity which they provided was open to dispute and question. The words are certainly not meaningless. They are meaningful, but whether they are more meaningful than the original words is open to doubt. So as to be certain that we take full advantage of the Law Society's learning, I commend the amendments to the House.

Mr. Cash: The amendments emanate from the Law Society, of which I am a member. I was concerned to hear that the amendments were suggested so late in our proceedings. We received late amendments during the Committee stage and I had to raise the matter with the Law Society.
I take your point, Mr. Deputy Speaker, about not going on about consultation, but this Bill is important and it has been essential to give Ministers and others as much time as possible to consider all aspects. Amendments which arrived late made that difficult for members of the Committee.

Question put and agreed to.

Mr. Pavitt: On a point of order, Mr. Deputy Speaker. I should be grateful for your advice. I have been in the House for a long time, but today I have been faced with a new situation. A total of 581 Lords amendments are before the House. You, Mr. Deputy Speaker, have just ruled that an hon. Member, having spoken on a group of amendments, must seek the leave of the House if he wishes to speak again. If an hon. Member has spoken about one amendment in a group of 10, is he precluded from speaking again on another amendment in the group? Do we have to deal in one intervention with all the amendments in the group or are we able, if we accept one amendment, to talk about another amendment in that group? After all, we might wish to divide the House on one of the other amendments. For me, your ruling is unprecedented.

Mr. Deputy Speaker: I appreciate the difficulty of considering a large number of amendments. One of the purposes of Mr. Speaker's selection of amendments,


putting like amendments in a group, is to enable us to debate them together. Having participated once in a debate on a group of amendments, an hon. Member can speak again only with the leave of the House.

Lords amendments Nos. 394 to 401 agreed to.

Lords amendment: No. 402, in page 147, leave out lines 36 and 37 and insert—
(2) A contract shall be regarded as made for investment purposes if it is made or traded on a recognised investment exchange or made otherwise than on a recognised investment exchange but expressed to be as traded on such an exchange or on the same terms as those on which an equivalent contract would be made on such an exchange.
(2A) A contract not falling within Note (2) above shall be regarded as made for commercial purposes if under the terms of the contract delivery is to be made within seven days.

Mr. Howard: I beg to move, That this House doth agree with the Lords in the said amendment.

Mr. Deputy Speaker: With this it will be convenient to take amendments Nos. 403 and 404.

Mr. Howard: These amendments are the result of very helpful advice that we have received from the commodity and futures exchanges and the banks which do business both on such exchanges and off-exchange.
The original provisions in the Bill do not, we now acknowledge, fully deal with contracts made off a recognised investment exchange, albeit on the same terms as those of contracts made or traded on such exchanges or even where they are expressed to be traded as such. The futures exchanges expressed their concern that without an amendment there would be a possibility of abuse by unscrupulous, unregulated brokers. We share that fear. We do not wish to see futures contracts being offered to the public on the standard terms of a recognised investment exchange where the broker has managed to avoid authorisation —and regulation—simply by designating those off-exchange contracts as having a "commercial purpose". The amendment would deal with that problem.
A further point that arose during discussions was the question of "spot" contracts. It was proposed that spot contracts—sometimes also called "cash" contracts—should be excluded from the definition of "futures" when made off a recognised investment exchange even though such contracts bear many of the characteristics of futures. For example, the Bill currently defines a contract as a "future" where, inter alia,
delivery is to be made at a future date".
We are agreed that the purpose of entering into a sport contract is to obtain possession of the property in question not, as is the case with "futures", to assume or to transfer the risk of commodity price changes. This is already the import of note 3(b) of paragraph 8, but it is obviously desirable to put this beyond question. This is done by the addition proposed at paragraph (2A) by amendment 402.
I now turn to the effect of note 3(c) of paragraph 8 of schedule 1. I can confirm that it never was the Government's intention to catch within the definition of "futures" any physical forward delivery contracts which are entered into for commercial purposes. The problem stems from a possible interpretation of note 3(c). We have given an assurance to the physicals markets associations which publish standard terms on which their members enter into contracts, including the British Bankers'

Association and the Grain and Feed Trade Association, that the provisions relating to "futures" were not meant to extend to the foreign exchange, bullion or physical commodity dealings of their members when made for commercial purposes. Accordingly, to make this clear, the amendment to note 3(c) makes the provision a one-way indicator, the presence of which suggests a commercial purpose but the absence of which suggests nothing.
Finally, I turn to amendment No. 404. We have accepted that by no means all futures contracts require that a price is agreed upon when the contract is made. We have been advised that contracts are frequently made between brokers and "clients" expressed as a contract between principals under which the price is determined by the price at which a subsequent matching contract is executed by the broker on the market floor. Furthermore, it is common practice in some futures markets to allow quality and quantity tolerances to determine the price in the event of delivery. The provisions that we have added as a new note 5 take account of these matters.

Mr. Gould: I thank the Minister for that explanation of some important and useful changes to the schedule. They certainly help to make clear the new regime which is to apply to some important and relatively novel forms of trading.
I asked the Minister a question in Committee to which I am certain he gave me a satisfactory reply, but I cannot remember it. The amendments deal with passages in paragraphs to the schedule which are sometimes preceded by the heading "Notes". Why is that, and does the heading make any difference to the status of the provisions?

Mr. Howard: With the leave of the House, Mr. Deputy Speaker, I shall respond to the question of the hon. Member for Dagenham (Mr. Gould). The hon. Gentleman's surmise of the import of the explanation which I gave in Committee and which he failed to recollect is correct.

Question put and agreed to.

Lords amendments Nos. 403 to 409 agreed to.

Lords amendment: No. 410, in page 149, leave out lines 32 to 35 and insert—
"Investment advice
15. Giving, or offering or agreeing to give, to persons in their capacity as investors or potential investors advice on the merits of their purchasing, selling, subscribing for or underwriting an investment, or exercising any right conferred by an investment to acquire, dispose of, underwrite or convert an investment.";

Mr. Howard: I beg to move, That this House doth agree with the Lords in the said amendment.
The amendment narrows the definition of "investment advice" in response to concerns that certain types of advice had inadvertently been included. It may be helpful if I mention some of the main aspects in which the definition has been narrowed. First, to be within the new definition, advice would have to be given on the merits in the recipient's capacity as an investor of buying or selling the investment or doing any of the other things specified in the amendment. This would exclude, for example, advice about tax or the legal consequences of buying an investment. Secondly, advice about classes of investment as opposed to particular investments would not be caught. Thus general advice that life assurance was a safer investment than commodity futures would not rank as investment advice, but a recommendation to buy a


particular policy would. Thirdly, advice about the exercise of rights conferred by investment would fall within the definition only if the rights concerned were rights to buy, sell, underwrite or convert an investment. This makes clear that advice to vote for the election of a particular director at a company's annual general meeting, for example, would not he caught.

Mr. Gould: I am grateful to the Minister for introducing the amendment. I am sure that it is a well intentioned attempt to deal with the problem which exercised my noble Friends in another place, but I am not necessarily convinced that "merits" has exactly the effect that the Minister claims. I concede, however, that these are difficult drafting matters and I can only join the hon. and learned Gentleman in hoping that he has managed to make the distinctions clear in the form of words chosen.

Mr. Tim Smith: I have listened carefully to what my hon. and learned Friend the Minister has said about the way in which the definition has been narrowed. When I read the amendment I thought that there were two ways in which it had been narrowed. First, advice has to be given on the merits. Secondly, advice has to be given to persons in their capacity as investors. I may have missed the explanation, but I do not understand the consequences of bringing that phrase into the paragraph. Perhaps my hon. and learned Friend will provide some explanation.

Mr. Howard: With the leave of the House, Mr. Deputy Speaker, I shall respond to the intervention of my hon. Friend the Member for Beaconsfield (Mr. Smith). I suppose that if advice were given in a purely academic context as part of a seminar for academic purposes, where those receiving the advice were not investors or potential investors, that might be one example. It is not, however, the example that has been drawn to my attention on a piece of paper that has just been passed to me. That does not necessarily mean that it is not an apposite example.
An example which may be even more apposite relates to advice on the merits of taxation, for instance, which ties in with the capacity of the person to whom the advice is given. In those circumstances, that person would not be regarded as an investor or potential investor.

Question put and agreed to.

Lords amendment: No. 411, in page 150, line 4, leave out paragraph 17 and insert—
17.—(1) Paragraph 12 above applies to a transaction which is or is to be entered into by a person as principal only if—

(a) he holds himself out as willing to enter into transactions of that kind at prices determined by him generally and continuously rather than in respect of each particular transaction; or
(b) he holds himself out as engaging in the business of buying investments with a view to selling them and those investments are or include investments of the kind to which the transaction relates; or
(c) he regularly solicits members of the public for the purpose of inducing them to enter as principals or agents into transactions to which that paragraph applies and the transaction is or is to be entered into as a result of his having solicited members of the public in that manner.

(2) In sub-paragraph (1) above "buying" and "selling" means buying and selling by transactions to which paragraph 12 above applies and "members of the public", in relation to the person soliciting them "the relevant person", means any other persons except—

(a) authorised persons, exempted persons, or persons holding a permission under paragraph 21A below;
(b) members of the same group as the relevant person;

(c) persons who are or propose to become participators with the relevant person in a joint enterprise;
(d) any person who is solicited by the relevant person with a view to—

(i) the acquisition by the relevant person of 20 per cent. or more of the voting shares in a body corporate (that is to say, shares carrying not less than that percentage of the voting rights attributable to share capital which are exercisable in all circumstances at any general meeting of the body); or
(ii) if the relevant person (either alone or with other members of the same group as himself) holds 20 per cent. or more of the voting shares in a body corporate, the acquisition by him of further shares in the body or the disposal by him of shares in that body to the person solicited or to a member of the same group as that person; or
(iii) if the person solicited (either alone or with other members of the same group as himself) holds 20 per cent. or more of the voting shares in a body corporate, the disposal by the relevant person of further shares in that body to the person solicited or to a member of the same group as that person;

(e) any person whose head office is outside the United Kingdom, who is solicited by an approach made or directed to him at a place outside the United Kingdom and whose ordinary business involves him in engaging in activities which fall within Part II of this Schedule or would do so apart from this Part or Part IV.

(3) Sub-paragraph (1) above applies only if the investment to which the transaction relates or will relate falls within any of paragraphs 1 to 6 above or, so far as relevant to arty of those paragraphs, paragraph 11 above.
(4) Paragraph 12 above does not apply to a transaction which relates or is to relate to any other investment and which is or is to be entered into by a person as principal if he is not an authorised person and the transaction is or is to be entered into by him—

(a) with or through an authorised person, an exempted person or a person holding a permission under paragraph 21A below; or
(b) through an office outside the United Kingdom, maintained by a party to the transaction, and with or through a person whose head office is situated outside the United Kingdom and whose ordinary business is such as is mentioned in sub-paragraph (2)(e) above".

Mr. Howard: I beg to move, That this House doth agree with the Lords in the said amendment.

Mr. Deputy Speaker: With this it will be convenient to take amendments Nos. 413 and 420. I have to inform the House that amendment No. 420 involves privilege.

Mr. Howard: This group of amendments makes important changes to the definition of investment business in schedule 1. Important though the changes are, however, they are changes only at the boundaries. They would not affect the position of mainstream investment business. Definitions are notoriously difficult, especially in a Bill of this sort, as are decisions about the precise boundaries of areas to be regulated. The House will recall that one of the major conclusions of the Gower report, on which much of the Bill is based, was that the definition of investment to which existing law applied was outdated and too narrow and that a much broader and more flexible definition was needed. Accordingly, the Bill as presented included wide definitions of investment and investment business, which in turn proved to be too wide in some respects.
10.15 am
Particular concern was expressed by the Confederation of British Industry and the Association of Corporate Treasurers, among others, that a number of industrial and commercial companies would come within the definition of investment business as the Bill was originally drafted. These are not the type of companies to which the Bill was intended to apply. Their investment activities are only peripheral to their main commercial activities and they generally confine themselves to the professional market place and do nothing which affects the ordinary investor. This group of amendments is aimed at meeting the remaining concerns without at the same time creating loopholes which could be exploited by the unscrupulous. The amendments look and are extensive, but I emphasise that they are concerned with the detailed definition of the activities to be regarded as investment business. Mainstream investment activities are not affected.
Amendment No. 411 removes paragraph 17 and replaces it with a new paragraph, but that does not reflect any fundamental change in the philosophy underlying the paragraph. It is still concerned with dealings by a person as principal and the changes made are mostly detailed ones. Perhaps I should comment particularly on the change which will have the effect that a person will not be required to be authorised to solicit shareholders for the purpose of acquiring a strategic stake in a company. The effect will not be to allow such solicitation to take place without any controls. Unauthorised as well as authorised persons would be subject to the rules in clause 51 on unsolicited calls. Investment advertisements will be subject to controls under clause 52. The only effect, therefore, is that a person will not be required to be authorised solely by virtue of his regularly soliciting persons for this particular purpose.
The basic principle underlying new paragraph 18A, which is introduced by amendment No. 413, is that nothing which is done between companies in the same group or between participators in a joint enterprise is to be regarded as constituting investment business. In considering transactions between any member of the group or participator in the enterprise and a third party, any transaction into which a member or participator enters on behalf of another member or participator is treated as though it were entered into by him as principal.

Mr. Tim Smith: Will my hon. and learned Friend explain how minorities would be protected under these provisions? A group may consist of subsidiary companies, all of which are not necessarily wholly owned. How will minority shareholders be protected from investment advice that is taken in the group?

Mr. Howard: I do not think that the issue of minorities arises in this context. We are concerned with a company which engages in activities in which it would normally engage as a principal. If an offer is made on behalf of a company to shareholders in another company for their shares, we are concerned with whether the company should be deprived of its exclusion from the Bill's provisions by virtue of the fact that it is acting on behalf of other companies in the group and not only as a principal. That is why I say that I do not think that the protection of minority shareholders arises in this context. Minority shareholders have the benefit of the protection that is afforded by the general provisions of company law.
Amendment No. 413 introduces paragraph 18B, which is concerned wth sales finance. Export finance in particular, especially where large sums are required, frequently involves the use of instruments which fall within the definition of investments. The attractiveness of the financial package associated with an offer to supply goods or services is frequently an important consideration for the customer. Many industrial and commercial companies have developed in-house expertise to assemble these packages rather than relying on external financial advisers.
The amendment is intended to exclude such operations from the requirement to be authorised so long as certain conditions are complied with. The principal condition is that the activities would be excluded only if they were engaged in for the purpose of or in connection with the sale or supply by the supplier of particular goods or services or related sale or supply. It may be helpful to explain the concept of related sale or supply. A construction company, for example, may contract with a customer to build a power station, the turbines of which are to be sold direct to the customer by a third party. The sale of the turbines would be a related sale or supply and activities engaged in by the construction company in connection with that sale would benefit from the exclusion provided.
The second main condition is that where the provision of sale finance involves the supplier acting as the customer's agent in dealing with the outside world, the supplier can gain the benefit of the paragraph only if he confines himself to activities which, if he were dealing on his own account rather than as the customer's agent, would themselves be excluded from the definition of investment business.
These two amendments will, we believe, solve most of the problems which have been raised with us on behalf of industrial and commercial companies. None the less, there will remain a few such companies whose activities will still be substantial enough to require them to be authorised. In most cases these companies will deal only with similarly sophisticated companies and with professionals in the investment markets. Amendment No. 420 therefore provides a procedure for exempting such companies from the requirement to be authorised. Exemption can be granted only if the conditions in subparagraph (3) are met. In particular, it is expected that permissions granted under the paragraph will be limited to persons who do not deal with members of the public.
Amendment No. 420 does not lay down any procedure for the grant or withdrawal of permissions and leaves scope for the exercise of considerable discretion as to the grounds on which a permission is granted or withdrawn. I believe that this flexibility to be desirable, given the problem which the provision is designed to solve, but the absence of settled procedures and criteria should not be taken as an indication that the power will be exercised in an arbitrary manner.
I would expect the Secretary of State or designated agency to make public the guidelines which he or it would follow in deciding whether to grant or to withdraw a permission under the paragraph, and also to institute administrative arrangements so that decisions were taken on a reasonable timescale. Certainly, in considering any proposal that powers should be transferred to a designated agency, the Secretary of State will wish to consider carefully the availability of such guidelines and how it is proposed that the powers under this paragraph should be exercised.

Mr. Gould: The Minister's explanation of the measure shows that he has made a valiant attempt to meet the concerns of the CBI, the Association of Corporate Treasurers and others about the difficult definitional problems. I have no quarrel with what the Minister has sought to achieve. I share his hope that the provisions will secure that objective. The only observation I make is that, as in so many other of the difficult problems with which the drafters of the Bill have had to deal, we must realise that dividing lines drawn now and which look appropriate now could well be inappropriate in changing circumstances.
One has only to reflect on the fact that many industrial and commercial companies in today's unhappy climate are having great difficulty in making profits on their mainstream operations. Many remain in profit only by virtue of the activities of their corporate treasurers in dealing with money markets, foreign exchange markets, and so on. It would be relatively easy for some of the companies which might be affected by the provisions to slip from one category to the other—in other words, to become less industrial and commercial companies and more financial companies. We must watch that carefully.
The dividing line between what is incidental investment business and what is mainstream business must be watched, as the position can change, as is the case with the other dividing line with which amendment No. 420 is designed to deal. The problem has also arisen in other respects—for instance, whether an investor or someone engaged in the investment business is dealing with other professional investors in every circumstance. The procedure which the Minister has outlined, which is represented in amendment No. 420, gives the requisite flexibility. The Minister and his successors, whichever party is in government, will have to watch those matters carefully. It is worth recording at this point that changes may have to be made frequently.

Mr. Teddy Taylor: Can my hon. and learned Friend say whether new paragraph 17(1) (c) would remove any protection for the general public against being cascaded with misleading information about investment in unsound schemes, such as the construction of the Channel tunnel?

Mr. Pavitt: I hope that the Minister will forgive me for my ignorance in seeking an explanation of new paragraph 17(1)(b). I am more at home in talking about the National Health Service than I am in the stratosphere of high finance. I am sure that all hon. Members will understand my asking: how does a principal hold himself out to be engaged in either investment or speculation? What process must he go through if he is to conform to the strictures contained in the new paragraph? Since my days on the stock exchange floor there have been gigantic changes. For example, the position of a principal who is a jobber or a broker has altered recently.
New paragraph 17(1)(b) relates to a person buying investments with a view to selling them. He is really buying to make a profit. The Minister said that there were two processes—one involving people who are in the business purely for making a quick profit and turnover, and those, such as borough treasurers, and so on, who are in the market for investment purposes. Does the Bill cover a person buying for a profit and selling subsequent to a rise? Does it include the position of a principal engaged in

speculation and selling shares, stock, debentures, or any other form of negotiable security in the hope that before he comes to settle he can buy them back—in other words, the bear position rather than the hull position? Does new paragraph 17(1)(b) cover both those positions? Or does it cover only the person who speculates to make a profit by buying cheap and selling dear, and not the other way round?

Mr. Howard: My hon. Friend the Member for Southend, East (Mr. Taylor) will appreciate how severe the temptation is for me to be drawn into extensive discussion on the Channel tunnel project and how unwise it would be for me to succumb to that temptation. I content myself with the observation that the protections of clauses 51 and 52 will still be available, as I said in opening, and I think that that provides the answer to the general point that he raised.
The hon. Member for Brent, South (Mr. Pavitt) referred to the concept of "holding oneself out". That concept is reasonably well recognised in law. It is riot a novel creation of this legislation, and it would not be a difficult concept for the courts to interpret in the context of the legislation. Those who make markets, who use the new technology in the stock exchange and who take advertisements in newspapers will readily be seen to be holding themselves out. I do not think that any difficulty should arise about that concept.
My initial reaction to the hon. Gentleman's second point—it is not for me to give a definitive interpretation, as ultimately that will be a matter for the courts—is that the bear position to which he referred would be covered by the provision in the same way as other intentions would be.

Question put and agreed to.

Lords amendments Nos. 412 to 419 agreed to.

Lords amendment No. 420 agreed to. [Special Entry.]

Lords amendments Nos. 421 to 430 agreed to.

Lords amendment: No. 431, in page 155, line 20, leave out from "include" to end of line 21 and insert
a number of persons independent of the organisation and its members sufficient to secure the balance referred to in subparagraph (1)(b) above.".

Mr. Howard: I beg to move, That this House doth agree with the Lords in the said amendment.
It has always been the Government's intention that the persons responsible for making and enforcing the rules of a self-regulating organisation should include a sufficient number of persons independent of the organisation and its members to secure a proper balance between the interests of the organisation or its members and those of the public. During the debate in another place on the Bill it was suggested that the link between the sufficient number and the balance to be achieved was not expressed clearly enough. This amendment makes clear what is meant by "sufficient" in this context.

Question put and agreed to.

Lords amendment: No. 432, in page 155, line 24, at end insert—
(2) The arrangements may make provision for the whole or part of that function to be performed by and to be the responsibility of a body or person independent of the organisation.

Mr. Howard: I beg to move, That this House doth agree with the Lords in the said amendment.
The amendment makes it clear that it is open to a recognised self-regulating organisation to establish, possibly in conjunction with other RSROs, an independent mechanism, such as an ombudsman scheme for the investigation of complaints against the organisation or its members. However, this mechanism would not be able to exercise the enforcement or disciplinary functions of a self-regulating organisation, which would remain the SRO's responsibility.
Generally speaking, if a function is carried out on behalf of a self-regulating organisation, the ultimate responsibility remains with that organisation. If the function of investigating complaints is carried out by an independent body, it may help to underline that very independence if responsibility is transferred as well. This would be important in a case in which a complaint is made against the organisation itself rather than one of its members.

Mr. Cash: I am glad to hear the Parliamentary Under-Secretary make that point. It will help considerably in cases in which, for example, bodies might otherwise be unreasonably and unfairly blackballed, because members of that organisation will have an opportunity to make representations. On the point about the cosy club, on which there are differences of opinion, only time will tell. It is possible for circumstances to arise in which somebody who is not regarded with the same favour in some circles as others would find himself excluded, perhaps unreasonably. In those circumstances, rather than having to go through the courts, he may be able to take advantage of this provision. Will the Parliamentary Under-Secretary confirm that that is what he has in mind?

Mr. John Butterfill: Will the Parliamentary Under-Secretary enlighten us as to why this clause is permissive rather than mandatory?

Mr. Howard: I am happy to confirm that the effect of the clause as drafted will cover the point raised by my hon. Friend the Member for Stafford (Mr. Cash).
The point raised by my hon. Friend the Member for Bournemouth, West (Mr. Butterfill) was carefully considered. We took the view that there was no need to make this provision mandatory. It may be that in a particular case an external investigation service, or at least an external element, would be preferable, but if a wholly internal investigation service can provide adequate protection for investments, I cannot see why it should be ruled out. The key point is that the Secretary of State or designated agency will have to be satisfied that the arrangements are effective, whether they are internal or external.
If an investor is aggrieved at the result of the self-regulating organisation's investigation, he can refer his complaint to the designated agency. The agency, by virtue of paragraph 4 of schedule 5, will need to have arrangements for investigating complaints against authorised persons and against SROs. If amendment No. 439, to which we are about to turn, is agreed, those arrangements will be required to include in appropriate cases arrangements for the independent investigation of complaints against authorised persons. Therefore, the Bill provides a means whereby a person who is dissatisfied with a self-regulating organisation's investigation of his

complaint can have his complaint investigated by somebody independent of the organisation. Consequently, the requirement that each self-regulating organisation should have its own ombudsman is unnecessary.

Question put and agreed to.

Lords amendments Nos. 434 to 436 agreed to.

Schedule 5

QUALIFICATIONS OF DESIGNATED AGENCY

Lords amendment: No. 437, in page 159, line 11, at end insert—
and the composition of that body must be such as to secure a proper balance between the interests of persons carrying on investment business and the interests of the public.".

Mr. Howard: I beg to move, That this House doth agree with the Lords in the said amendment.

Mr. Deputy Speaker: With this it will be convenient to take the amendent in the name of the hon. Member for Yeovil (Mr. Ashdown).

Mr. Howard: Lords amendment No. 437 is similar to the one concerning the composition of governing bodies of self-regulating organisations, which has already been agreed to. The schedule also provides that the members of the governing body of the designated agency must be drawn from persons having experience in investment business and other persons as described in the schedule. This amendment provides that the composition of the body overall must be sufficient to ensure a proper balance between the interests of those who carry on investment business and those of the public. That has always been our intention. The amendment makes it an express requirement.

Mr. Ian Wrigglesworth: I beg to move, as an amendment to the Lords amendment, at the end, add
'by ensuring that at least one third of the members of the body are independent non-practitioners'.
I begin by declaring an interest as an adviser to Barclays bank. These matters involving independent representation on the SIB have been examined at some length in Committee and in the other place. I do not wish to detain the House too long. The final stage of the Bill provided us with another opportunity to be more precise about the representation on the SIB of people independent of City interests, the lay people referred to by various hon. Members. It will help to sustain public confidence in the body if there is a more precise definition of the independent representation on the SIB. We welcome the change that the Government introduced in the other place in amendment No. 437. Clearly, that matches the other position, which we have accepted, of the SROs.
We still believe that this key body, which stands at the pinnacle of the supervision of the new City regime, should have independent representation on it. We should like to pin down the Government and the SIB on the scale of representation. In the amendment, we suggest that at least one third of the members of the SIB should be independent. As there have been debates about the definition of members, we have defined them as independent non-practitioners. I hope that the proposal, which is more precise than the amendment from the other place, will meet with some support in the House, and that


the Government will say that their intention is that there should he very strong representation of consumer interests on the SIB.

Mr. Gould: I, too, welcome the Lords amendment, as I welcomed the similar amendment concerning self-regulating organisations. I have some sympathy with the amendment moved by the hon. Member for Stockton (Mr. Wrigglesworth). However, the difficulty is that, whenever one specifies a particular number or proportion, there is a tendency to regard it as a maximum rather than a minimum. There are also possible grave difficulties in deciding into which category individuals fall. Although I strongly sympathise with the amendment, I realise that there may be objections to it.
I welcome the notion that the public interest should be directly represented and recognised in this way and that a proper balance should be established. It would be helpful if the Under-Secretary of State would say a little more about exactly how that is to be done. What is his concept of the public interest? How are people to be appointed to represent that interest? Are they, as is sometimes suggested, to be appointed because they represent a range of identifiable interests—professional lobbying interests, as it were—or are they to be selected as being genuinely representative of the public at large, and, if so, on the basis of what qualities?
The Minister suggested in a discussion with a deputation from my union, the Association of Scientific, Technical and Managerial Staffs, that he would be looking to the personal qualities of appointees and, although it may be fairly obvious, I wonder whether he can say what those qualities might be. Will he also say whether he has any intention of recognising the legitimate interests of a body of people whose interests are very often overlooked, especially in the selling of life insurance by way of investment business? We have looked long and hard at many of the questions involved there but few people have spoken on behalf of the sales force on the ground, especially in the case of home service insurance sales. Is there any intention on the part of the Minister to allow for the representation of that sort of group on the SIB?
I also wish to ask the Minister a wider question about the general way in which appointments are to be made by focusing on a specific instance. The Minister will recall that there were some reports during the summer about an appointment which the Minister wished to make but did not make. That was the appointment of John Kay, who is a well-known and well-established reputable economist, who was at that time the director of the Institute for Fiscal Studies. As far as I am aware, he has no obvious political affiliations and, if they do exist, they are certainly not with my party. I should also say that I have never discussed this matter with John Kay and I do not raise it at his instance.
John Kay appeared to commend himself to the Minister. I am not obliged to make any case for him but, as I understand it, the Minister had accepted that there was a good case for appointing him to the SIB. My information is that what then happened was extraordinary. The Minister was summoned to the Treasury by the Chancellor. I do not know what happened at that meeting, whether it took place in the Treasury or in other circumstances. However, as far as we can tell, John Kay has not been, and is not to be, appointed to the SIB.
The House is entitled to some sort of explanation as to why that is so and how it happened. Was it that some deep,

dark and dreadful secret was revealed of which the Minister had been unaware and which served to disqualify John Kay, or was it an even more unattractive proposition, that in some sense he was regarded as having been the originator of advice, forecasts and reports that did not please the Chancellor and was being blackballed for political reasons? That would be even more disturbing. In either case it is curious, to say the least, that the Treasury was involved at all. This is a Department of Trade and Industry Bill and appointments are to be made jointly by the Secretary of State and the Governor of the Bank of England. Where does the Treasury come into the matter? We are constantly told that the SIB is a private body and is to be independent of the Treasury. That is the whole point. Indeed it is the only, and flimsy, point for allowing it to retain that status. Yet, if the reports I have received are correct, the Chancellor is intervening in the most direct and negative way in the matter of appointments to the board.
The Minister must confirm that story or deny it. If he cannot do either of those, we are left with a worrying situation. The Bill is not as it has been presented to us until now. It casts not only an adverse light on prospects for the way in which the measure will operate but forecasts a gloomy setting for the way in which the Government do their business.

Mr. Anthony Nelson: I regard this as the most important amendment that we will consider today. I do not think that we should let this opportunity pass without probing the Minister and debating the criteria and qualifications of members of the SIB. This amendment is more important than the one that we passed earlier concerning the composition of SROs, for while each SRO will determine its own way and have a variable example in terms of the independent and lay membership, in this instance we are debating the principal supervisory body for the framework of regulation that we are establishing under the Bill.
It is important that we get the right people and the right proportion of people on the SIB to fulfil the best intentions of the legislation. A company, body or institution is only as good as the people in it, and much of the import and effectiveness of the legislation will depend upon the assiduity, integrity and lay composition of the SIB.
In Committee we had an important debate on this subject when I brought into question the role of the Governor of the Bank of England acting jointly with the Secretary of State, or under designation, the chairman of the SIB, to appoint—

Mr. Tim Smith: That is not correct.

Mr. Nelson: My hon. Friend is right. That power cannot be designated to the SIB. I brought into question the duty of the Governor of the Bank of England to act jointly with the Secretary of State in appointing the chairman and members of the SIB. I expressed reservations about what I regarded as the continued encroachment—I do not use that word too pejoratively —of the Bank of England outside its area of prudential control of the banking system into supervisory control of the investment markets. Historically, one understands, in the absence of any other body or responsibility, the need for the Governor to do so However, with the new body in


place, and the legislation enacted, it should be the right of the Secretary of State alone. I do not say that he should not consult the Governor of the Bank of England, but it should be his right to appoint the chairman and, in consultation with him, to appoint the members of the SIB.
In the extent to which we allow the absolute right of the Secretary of State to be diminished by having to obtain the approval of the Governor of the Bank of England, thereby providing the Governor with a veto over what the Secretary of State might like to do, we are denying ourselves, as democratically elected representatives, and the Government of the day, the opportunity to do what we and they consider to be right. I hope that the Governor and the Secretary of State will always act with a similar outlook. However, there must be a reason for the requirement that the decision should be a joint one. That reason must be that there will be certain instances in which we are prepared to see the Governor of the Bank of England operate a veto.
I still take the view that the Governor should not be able to operate such a veto. We should have the confidence in our legislation to say that whatever changes of Government or changes in the complexion of Government there may be in the future, we must not detract from the right of Secretaries of State who are appointed by the House to make important decisions which affect the overall government and supervision of the City of London. I have that reservation. I am unhappy that under this legislation, as it will undoubtedly go through, the Governor will continue to have a role in deciding how many lay members there should be on the board and what proportion of the total they should comprise.
I have a good deal of sympathy with the amendment moved by the hon. Member for Stockton, South (Mr. Wrigglesworth) in the absence of the hon. Member for Yeovil (Mr. Ashdown). It follows a similar debate in Committee. I understand the point made by the hon. Member for Dagenham (Mr. Gould), that once one prescribes a certain proportion it becomes the maximum rather than the minimum. However, the amendment makes it clear that it is at least a third. The problem is that we may not even get a third if we do not at least have an undertaking or if the amendment is not put into the Bill.
The SIB has announced a good many of its members, including some lay members, representatives from the Consumers Association and some ostensibly lay members. I have my doubts as to how lay they are. Many of them, as with other bodies, are highly institutionalised individuals and will not be there to do what I would like lay members to do, which is to represent the interests of investors in as objective a way as possible.
That is a very important point which we should reiterate, because the whole purpose of the Bill is about investor protection. It is not about making the City run more smoothly or about making the city more profitable. It is not about exclusively trying to deal with some of the worst problems that have been identified in the mechanics of the City in recent years. Its principal objective is to update antiquated legislation on investor protection and ensure that the latter is more adequately safeguarded in the brave new world of finance in which people will operate.
Given that situation, it should be uppermost in our minds, and in the mind of the Governor and of the Secretary of State at every stage in conducting their

responsibilities according to the legislation, that they should enhance investor protection. In deciding the composition and individual membership of the SIB, the criterion above all others, the first to be considered, must be whether it will enhance investor protection. I pay tribute to the Wilson committee's report, which gave prominence to the inadequacy of lay representation on City institutions. My criticism, which I have expressed on numerous occasions over the years, has always been that it has not been adequate in ostensibly self-regulating organisations in the past. Even now I am uncertain and remain suspicious about the extent to which, once the Bill passes through Parliament, we shall have incisive, determined objective lay representation on the SIB and, indeed, the SROs underneath it.
Despite the undoubted ability and integrity of our present Governor, I do not have great confidence that, if he acts jointly with the Secretary of State, people of that quality will be imported. That is another reason why I bring into question the right of the Governor to be involved in the decision. After all, I do not think that anyone would seriously suggest that the governorship of the Bank of England or the membership of the board of directors of the Bank of England should be subject to a decision jointly between the chairman of the SIB and the Chancellor. That will not be so. We are talking about the laying down of a pecking order in the City, which the Governor and the officials in the Bank of England wanted to make clear at the outset so that, in the end, the bank remains paramount and retains its supremacy in that and other matters. I am not satisfied that that is necessary or in the interests of investors in general.
As has been mentioned by my hon. and learned Friend the Minister and others in the debate, the critical factor will be the quality of the people on the board and the qualities that the Secretary of State will be looking for in appointing them. I hope that they will be genuinely lay people who have not had too much experience of the investment market, although I understand that some of the decisions in which they will have to be involved will be complex. Nevertheless, I hope and believe that lay representation will be able to engage in and contribute to such decisions, and with some ability.
I also hope that lay representation will not be, as it were, passengers from organisations outside the City, who feel that they represent consumer interests. Obviously there is somebody there from the Consumers Association, and probably that is a good thing, but I do not necessarily believe that individuals who may have a myriad other responsibilities, whether in consumer protection, business or industry, should be appointed just because it looks good. There are too many boards on which there are people with eminent names, who are undoubtedly people of integrity and are respected, but the fact is that they do not have the time to instigate particular areas of inquiry and fulfil the responsibilities that we want from lay membership.
I should like to see a little bit of daring in the appointments. I should like to see the appointment of lay people whom we have never heard of before, who will give of their time and use their ingenuity and imagination to follow up lines of inquiry or suspicion—

Mr. Cash: We might even see some Members of Parliament.

Mr. Nelson: I do not rule out jobs for the boys. Perhaps we should discuss that openly. I can think of few people who would make better members of the SIB than many hon. Members on both sides of the House who have contributed to the debates. I can mention that with equanimity, because I know that none of us would stand a chance of being appointed, but such is life. There may be life after death after the next election for at least some Opposition Members. I would not want them to be excluded from such considerations.
I, too, was concerned about the case of Mr. John Kay. I implore my hon. and learned Friend the Minister to give a full explanation. I suspect that what I am asking may be echoed by several Conservative as well as Opposition Members. The situation must be cleared up. I have spoken to the Governor of the Bank of England about it, and I am led to believe that no objections were forthcoming from the bank about that appointment. It would be wrong and a dangerous precedent if we were to be left with the impression that other Government Departments were having undue influence over decisions and appointments, the mechanisms for which are clearly laid down in the legislation that we are discussing.
I have every confidence that a Conservative Government and Conservative Ministers would in no way be influenced, in the way that has been suggested by some of the more scurrilous commentaries, by the economic or political complexion of the individual concerned, but there remains a suspicion that, perhaps because of some of his economic policies and attitudes, on balance Mr. Kay was considered, not by the Secretary of State for Trade and Industry, not by the Governor of the Bank of England, not by the chairman of the SIB, but by another Minister or another Department, to be unacceptable.
That must be cleared up. While it may be the way of the world that there is informal consultation at inter-ministerial level before many appointments in public life are made, we are laying down legislation which we want to be properly observed once it is enacted. I hope that we shall have opportunities to speak again in the debate, with the leave of the House, if the matter is not satisfactorily cleared up.

Mr. Alan Howarth: The amendment and the amendment to it moved by the hon. Member for Stockton, South (Mr. Wrigglesworth) give us a useful opportunity to debate the important matter of the composition—the membership—of the designated agency, a subject that deserves some reflective consideration by the House. I welcome the fact that several hon. Members wish to speak in this important debate.
The matter of lay representation on the designated agency is inextricably bound up with the accountability of that agency. It is a real problem as to how the designated agency, the SIB, is to be kept under some ultimate control. After all, it will be a big beast in the jungle and, as is the way with big beasts, it will develop its own habits and momentum. Its staff will develop their own culture and they will go their own way. In many ways, that is what they should do because we are implementing a strategy of self-regulation. None the less, it is also the principle of the Bill that the apparatus of supervision of the investment industry should be kept accountable to the Secretary of State, the House and the public. How is that to be achieved? The designated agency is to be accountable to the Secretary of State for Trade and Industry—

Mr. Deputy Speaker: Order. I am trying to be as tolerant as I can in approaching the debate, but the hon. Gentleman is going too far beyond the terms of the amendment in discussing accountability. We are talking about the composition of the body.

Mr. Howarth: I will certainly heed your warning, Mr. Deputy Speaker.
The appointment of members is a responsibility of the Secretary of State for Trade and Industry. Will the Secretary of State have working within his Department a large bureaucracy, strong enough manned and equipped then to mark the SIB in its various functions? Is that the way in which the public interest will be guarded? It is unlikely that we will have a bureaucracy on that scale. It would be expensive, ineffective and involve duplication. At the same time, we have to he on our guard against the tendency of self-regulatory organisations, and indeed of professions, to look too carefully to their own interests arid too little to the interests of the public. There is a danger in the system that has been established that the SIB, like the SROs, having been given this very important arid dangerous power to exclude membership, may use that power to restrain competition. They would be using their devolved powers to restrict entry, to discipline members and to expel members of the investment community. We must watch that and this is where the question of lay representation arises.
11 am
It is a classic observation in economics that businesses which are to be regulated before long embrace their regulators, and we arrive at a state of affairs in which the regulators serve the interests of the businesses they are appointed to regulate. My hon. Friend the Member for Southend, East (Mr. Taylor) will not disagree with me that that is prevalent in other areas such as agriculture, air arid road transport. If the House will allow me to put it in this way, for lack of an equivalent Anglo-Saxon expression, we must be on our guard against "deformation professionelle". I apologise to my hon. Friend the Member for Southend, East for using European jargon. By that expression I mean the tendency for members of a profession to equate the interests of everyone else with their own interest.
We see examples of this among the most respectable and self-respecting professional people. We have seen how the Law Society defended as a manifestation of a supreme and timeless wisdom the solicitors' monopoly of conveyancing—and that happened before my hon. Friend the Member for Stafford (Mr. Cash) became a Member of the House. We have also seen the doctors, vigorously encouraged by the British Medical Association, feeling justified in telling their ailing patients that the National Health Service would be dismantled if we as mere politicians suggested that doctors should not have an unlimited right to prescribe any drugs they saw fit at whatever cost to the taxpayer. We are also witnessing a similar example in the sad case of the National Association of Schoolmasters and Union of Women Teachers, which is arguing that it is in the interests of education that it should pursue a pay claim by dint of disrupting children's schooling.
It would be prudent to suppose that this tendency on the part of professional people to assure that what suits them is in the general interest may manifest itself in the City. That is why the amendment proposed by the hon.


Member for Stockton, South is important. There should be adequate lay representation on the designated agency. If we examine the present membership of the agency, we see that it consists of 18 people including the chairman, Sir Kenneth Berrill. Of the 18, 14 are either members of professional investing institutions or members of bodies, firms or partnerships which make their money by advising professional investing institutions. There are three industrialists. They are an important element of what one might term lay representation except I am not sure that the general public would consider that industrialists are so far removed from being professional financiers that they could quite be regarded as lay.
The three industrialists who are members of the SIB are eminent and distinguished people. They are also very senior and busy people, as chairmen and chief executives of companies. It is doubtful whether in practice they will be able to give the personal time and attention which is needed to carry out their function as members of the SIB.
Mrs. Rachel Waterhouse is chairman of the Consumers Association and a member of the SIB. I have not met Mrs. Waterhouse and all that I have heard about her is good. She is an assiduous servant of the consumer interest. But she is very busy in many areas. As the sole Boadicea representing consumers on the SIB, and with so many other duties, there is some doubt as to whether even Mrs. Rachel Waterhouse, singlehanded, can perform the functions required.
My hon. Friend the Member for Chichester (Mr. Nelson) suggested in any event that we have to be a little sceptical about the capacity of professional representatives of the consumer adequately to represent consumer interests. To draw a parallel, as raised in an earlier debate, there is a feeling that the CBI is not the perfect representative of the business man. That is inevitable. Much as I admire the reported work of Mrs. Waterhouse, I find it difficult to believe that she can find time to consume anything but official lunches and papers, considering how much time she spends representing consumer interests.
We must find more genuine "village-Hampdens" and "village Waterhouses". But they will not be so easy to find. I wonder how my hon. and learned Friend the Minister envisages that they will be found. We cannot just take a random sample of applicants for TSB or British Gas shares. We would probably find if we did that they were German or Japanese who, as consumers, perhaps should be represented on the SIB. However, that is perhaps moving too far from the amendment.
The lay representation on the SIB must be strong. I am, however, also concerned that the SIB is too large and that it consists of 18 members. They could too easily be divided and conquered by powerful chairmen. I do not mean to imply in any that Sir Kenneth Berrill, for whom I have genuine admiration, will be other than dedicated to his proper functions as regulator and supervisor. But the SIB is a large body, consisting of many people who will not be full-time members. We must suppose that Sir Kenneth and Mr. Croft will run the show.
It is desirable that there should be genuinely effective and prominent members on the designated agency. I fear that is insufficiently achieved in the present membership. I hope that the Minister will comment on that. It will be difficult to ensure that the SIB adequately represents the

interests of consumers which, as a body, it should. It is rather a large body, consisting almost entirely of part-time members. I would rather see a smaller body with more full-time members and more lay members. Like the hon. Member for Dagenham (Mr. Gould), I believe that it is probably a mistake for the alliance parties to be dogmatic as to numbers. I have reservations about the amendment. But I would welcome my hon. and learned Friend's comments on the important issue of principle raised in the debate.

Mr. Cash: This is a very important provision. We ought to be extremely glad that the Government have brought forward, in the House of Lords, a provision that goes a considerable way towards ensuring that there is a proper balance between public interests on the one hand and the interests of the SIB on the other.
Lord Reid made it quite clear in the Pharmaceutical Society case that when making a judgment about how people should carry out their functions in a self-regulatory organisation—which in that case was a chartered body— the interests of the public must always prevail over the interests of remuneration — by which, in general terms, he meant self-interest. That is the heart of the matter and, in regard to the conduct of what will be carried out under the Bill, it is the heart of the Bill also.
As my hon. and learned Friend the Minister knows, I have on many occasions tabled amendments and raised questions about the importance of having independent, objective and competent assessments about the activities of the SROs. Indeed, I repeated those points yesterday. Those same questions arise regarding the SIB because it is at the apex of the financial services sector. We are now in the big bang, and I shall judge by whether it becomes a galaxy or a black hole. If the people involved do not carry out their functions properly—and it depends on who they are as to whether they will—the City is in for rather a disappointing time.
I am confident that we shall make the right appointments, and that the appointees will be people of quality, strong-minded, and independent as and when that is required. If they are not, we shall have wasted our time on this Bill. At the end of the day, the SIB will be regulating the SROs, and if they do not function effectively there will be no effective supervision over the City.
Yesterday I mentioned the number of foreign organisations coming into the City, and we must expect that. However, it is incumbent upon us to draw attention to the importance of ensuring that the people on the SROs and the SIB can all be relied upon to act with the independence and quality necessary to ensure that the financial services sector functions effectively.
In many ways it is rather like seeking to have non-executive members on a board—something that is well known in the City—so that we can be sure that when matters crop up that are of direct interest to the people involved in the organisation in question there are people of independent mind who will say, "Wait a minute, should we be doing this or that, or should we not take a second opinion?"
The question of quorum is also important, but there has been no reference to that yet in the debate. Irrespective of the number of people proposed as a minimum by the hon. Member for Stockton, South (Mr. Wrigglesworth), one third of members being independent practitioners could prove to be unwieldy.
When I tabled an amendment on the same point in Committee, I had a difference of opinion with other hon. Members. It is essential to have effective independence. The most important thing is to have people of strong character, considerable integrity and high calibre who will be determined to ensure that the system functions and that there will not be a cosy club within a cosy club. The system must be effective so that the big bang works in the interests of this country and ensures that the City stays in the forefront of the affairs of the nation.

Mr. Tim Smith: I suspect that the next occasion on which we shall have the opportunity to consider these matters will be early next year, when we shall have to consider the designation order for the SIB. One matter that we shall consider then will he the composition of the board.
I believe that the present composition fails to meet existing criteria in the Bill. There is no provision in the schedule for deputy chairmen, yet the board has two. They are both persons with experience of investment business rather than regular users of investment services. If there are to be two deputy chairmen, one should represent users of investment services.
My hon. Friend the Member for Stratford-on-Avon (Mr. Howarth) mentioned that, of the 18 board members, only four fit into category 3B while 14 fit into category 3A. Of the four, three are industrialists—undoubtedly users on their own account of the services provided by the City—and just one represents the interests of private investors. That is unsatisfactory and there should be at least three persons representing private investors.
If the hon. Member for Stockton, South (Mr. Wrigglesworth) had his way, there would be considerably more than that—

Mr. Wrigglesworth: Six.

Mr. Smith: Yes, three of each, so two further consumer members should be appointed. Mrs. Waterhouse has a difficult job because she is the sole representative of consumer interests. However, it was to protect the interests of the private investor that the Bill was first brought before the House.

Mr. Cash: Does my hon. Friend agree that the designation order will be subject to an affirmative resolution, so there will be a considerable incentive to ensure that the persons included on the list will be representative of the matters that we have discussed today? The order will have to be approved by both Houses of Parliament.

Mr. Smith: That is precisely what I said at the beginning of my speech. I said that the next occasion on which we will have the opportunity to consider these matters will be when we discuss the designation order, which is subject to affirmative resolution. We shall then also consider the composition of the board and whether the Government's proposals comply with the schedule.
I am concerned that, because of the preponderance of members being persons with experience of investment business and with a particular experience of a particular part of the City, inevitably it will be difficult for them to be objective. I am not being critical, but they will have a certain bias because they may have made their names by

promoting a product that they believe is more in the interests of investors than other products. We must be conscious of that.
My hon. Friend the Member for Bournemouth, West (Mr. Butterfill) and I have been pressing the board to do more to help the investors with a disclosure of charges and the provision of a level playing field. There are different interests between, first, the pure unit trust, secondly, the unit linked policy and, thirdly, the straightforward life assurance policy with major profits.
It is important to have more lay members on the board. I hope that when the final proposals are brought before the House early next year they will include an improved constitution for the board.

Mr. Howard: With the leave of the House, Mr. Deputy Speaker, I wish first to deal with the amendment moved by the hon. Member for Stockton, South (Mr. Wrigglesworth), which I invite the House to reject, largely for the reasons given by the hon. Member for Dagenham (Mr. Gould) and by my hon. Friends. I do not think that the rigid formula which is the basis of the amendment would make it easier to arrive at the proper balance that the main amendment before the House would require.
We have had an interesting and important debate. There is unanimity about the significance of the subject and about the importance of achieving a proper balance of membership on the SIB. There might be some differences about the route to be followed, but we are united about the importance of the end.
The hon. Member for Dagenham asked about the criteria which have been and will continue to be used to make appointments to the board and about the circumstances. The first requirement is that appointees should be people of the highest calibre and integrity who can make a valuable personal contribution to the board's work. That requirement militates against the appointment of unknown people as my hon. Friend the Member for Chichester (Mr. Nelson) suggested, or even the "villageHampdens" who were espoused by my hon. Friend the Member for Stratford-on-Avon (Mr. Howarth).
People of the highest calibre and integrity are also fairly busy people, but that does not mean that, if they accept an appointment such as this, they do not discharge the attached obligations with proper effectiveness and thoroughness. I am sure that all members of the board fulfil that requirement and devote the necessary attention to the task.
I should like to make it clear that nobody is appointed in a representative capacity but, if the board is to be effective, it must include people with knowledge and experience relevant to its work. When making appointments, my right hon. Friend the Secretary of State and the Governor of the Bank of England must have regard to the desirability of including people with knowledge of the different investment businesses being regulated, users of financial services and people with a consumer background. They must avoid having too large and unwieldy a board. That would not be desirable or help the board to achieve its purpose. All of those factors must be balanced.
My hon. Friend the Member for Stratford-on-Avon said that the structure which the Bill would put in place should not work in a way detrimental to competition. He will bear in mind the fact that the composition of the board and of SROs does not by any means constitute the only


safeguard against any anti-competitive flavour. He will appreciate the role of the Director General of Fair Trading which the Bill provides.
I am sure that, on reflection, my hon. Friend will accept that the users of financial services—the three members of the board to whom he referred with some qualification—would be in an especially advantageous position, as substantial users of financial services, to ensure that the system was not operated in a way which was in any sense detrimental to competition.
Reference has been made to the presence on the SIB of Mrs. Waterhouse and the three industrialist users, as though they were the only non-practitioner members. That overlooks the presence of the chief executive, Mr. Croft, who is not from a practitioner background, and the fact that the chairman is no longer a practitioner. I suggest that that combination provides an effective independent element on the board.
My hon. Friend the Member for Chichester returned to the charge that he has often made before based on his unhappiness about the role of the Governor of the Bank of England in the appointment of members of the board. It is important, as I have no doubt said before— we discussed this matter at some length in Committee—that the agency commands the respect of those it regulates. The Governor's presence does, and will continue to, reassure the business community that the people who are appointed will understand the proper concerns of that community. That will create the right atmosphere for compliance with the rules as a matter of course. It is important that the role of the Governor should be preserved—it provides an important safeguard.
I shall not be drawn into any comment on some of the press speculation about the appointment of any individual to the board. It would be most undesirable were I to do so, for reasons which I think will be obvious to hon. Members. It would create a most undesirable precedent and I shall refrain from any comment on that matter.

Mr. Wrigglesworth: With the leave of the House, I should like to comment on what has been said.
This has been a most useful debate and I hope that it has made it quite clear to the Minister and those involved in the appointment of members of the SIB that the House wants a strong—possibly an overwhelming—consumer and user interest on that board.
Not for the first time, the hon. Member for Chichester (Mr. Nelson) spoke strongly and clearly on this matter. I entirely agree with him that the purpose of the Bill must not be lost sight of. Its purpose is to protect the investor and to ensure the interests of the consumer. At times, as a result of ministerial statements and statements by others, one has wondered whether the interests of the City or the interests of consumers were being protected. I hope that, as a result of appointments to the board, the Government's predominant interest will be crystal clear.
Ours is not a rigid amendment. It does not specify a number that should be achieved. Rather it specifies a minimum, and a modest minimum at that—six board members representing consumer interests out of a total of 18. In view of assurances that have been given about consumer interests being represented on the board, I do not believe that we are demanding too much.
To judge from what the Minister has said today and previously, there seems to be some concern about finding people to perform the required role on the board. I hope that a good proportion of women will be appointed to represent consumer and other interests. There are many outstanding women who could perform the role of lay representatives extremely effectively. The Citizens Advice Bureaux movement, the Consumers Association—we have one from there already—and journalism spring to mind, but there are many other areas in which excellent people with time could be found to ensure that the consumer interest is satisfactorily represented. Time is important, and we have discussed it previously. Although the most effective people often have heavy commitments, it is vital to have people who can devote time to watching what is going on and taking a close interest in matters that come before the board so that they can make a full rather than a passing contribution to the SIB's work.
The hon. Member for Chichester also mentioned the involvement of the Governor of the Bank of England. He knows that I have considerable sympathy with his general view. I took the view that the bank should have lost its role in banking supervision. I should have liked a separate body to have been responsible for banking supervision, as is the case in the United States and several other countries. The central bank should act as a central bank, and not take on the rather curious role of nanny and spokesman for the City as well. Although the Bill now provides for Government involvement in the appointments, I hope that the Minister and his colleagues have noted the strong feeling of hon. Members on the importance of the responsibilities that the Secretary of State carries out on our behalf. We would not want to see the Bank of England and the Governor blackballing people whom the Government would properly want to see.
This has been a useful debate and I hope that the Minister has received the message loud and clear that we want good, strong, independent and lay representation on the SIB when it is finally established. In due course, as has been said, we shall have the designating order debate and during it we shall raise hell if we do not have the sort of representation that we have been seeking this morning and in previous debates during the Bill's passage. It is with that promise that I am happy to withdraw the amendment.

Amendment, by leave, withdrawn.

Lords amendment agreed to.

Lords amendment No. 438 agreed to.

Lords amendment: No. 439, in page 160, line 2, at end insert
(2) The arrangements must make provision for the investigation of complaints in respect of authorised persons to be carried out in appropriate cases independently of the agency and those persons.".

Mr. Howard: I beg to move, That this House doth agree with the Lords in the said amendment.
The amendment implements the assurance given on Report in another place that the Government would bring forward an amendment requiring a designated agency to have arrangements for the independent investigation of complaints against authorised persons. The amendment requires such independent investigation only "in appropriate cases". As I think Lord Morton recognised when moving a similar amendment concerning SROs on Report in another place, it would not be desirable to


require all complaints to be the subject of independent investigation. It may be quicker and easier to resolve some complaints in other ways, but it is right that an investor should normally have recourse to an independent person if his complaint has reached the designated agency—the top supervisory body in the system—and has still not been satisfactorily resolved. I am glad to say that the SIB is in any case planning to set up an ombudsman system. I welcome this move. The amendment will make some such arrangement a requirement if powers are to be transferred to a designated agency. I commend it to the House.

Mr. Gould: The use of mandatory language in the amendment is clearly the consequence of pressure put upon the Government in another place. For that reason, it may be appropriate at this stage to pay tribute to their Lordships in that they, like the Standing Committee, have done what they could—it has been a substantial element—to make the Bill a better piece of legislation. The amendment is part of that overall achievement.
The fact that a mandatory requirement has been imposed on the SIB with a permissive requirement applying to the SROs means that we should ask how the Minister envisages those provisions reacting with each other. Does he foresee, as clearly we must, the SIB setting up its ombudsman procedure, in effect removing from the SROs the need to do similarly? In other words, the permissive power seems unlikely to be used, and it would be useful if the Minister would confirm that that is his view.
How does the Minister think that the ombudsman procedure being set up by the SIB will work? Is it, to use the phrase of the insurance ombudsman, whom I had the good fortune to meet yesterday, a powered ombudsman—an ombudsman with the power, conferred presumably with the agreement of the contributing parties —to award sums of money by way of compensation and to apply other remedies? Or is it to be an ombudsman who simply makes recommendations which he hopes will be acted upon?
In the light of the discussions that we have already had on matters such as McDonald Wheeler, how does the Minister see the remedy fitting into what is by now—I make no complaint of this—a proliferation of potential remedies available to aggrieved investors? It would also be welcome if the Minister would say briefly whether there is anything in the work of his Department that would offer some crumb of comfort to investors who may have lost money as a result of the collapse of McDonald Wheeler.

Mr. Nelson: Two points cause me some disquiet. The first is the general point that, while I understand the import of what my hon. and learned Friend the Minister said, I remain a little concerned that we may in some way be detracting from the prime responsibility of the SIB to undertake inquiries and investigations. We are setting up the SIB, as we are the SROs, with the clear duty to investigate cases of abuse and dereliction of duty by authorised persons.
If we are to insist, as the amendment does, that arrangements must also be made for the investigation of complaints to be carried out in certain instances by bodies other than the designated agency— the SIB in this instance, or, in the previous amendment, the SROs—are we diluting or circumventing the responsibility of the SIB to investigate?
I should be happier if the SIB had that responsibility. I do not see many instances in which there would be a conflict of interest or where the integrity and objectivity of the SIB in making investigations could be brought into question. If it could, something would have to be done about the SIB, its composition, its officials and mechanisms for investigations.
I am not clear in what instances an independent, separate body from the SIB, over which we have no legislative control and which is not established by law, would have a preferential right to conduct an investigation, as opposed to the SIB. I am not convinced of the necessity or wisdom of diluting the investigatory arrangements that we have hitherto granted to the SIB.
Secondly, hon. Members will be aware that in Committee we made some important changes, not only to the status of the SIB, but to its investigative powers and its powers to prosecute offenders. One of the important changes that we made was to ensure that the SIB was able to investigate unauthorised as well as authorised persons. The reason for that is that there is no point in being able to investigate just the good guys, and not the bad guys.
It must be possible to respond to a complaint from a member of the public or a practitioner that somebody is ostensibly carrying on an unauthorised investment business which, remember, under the Bill, is a criminal offence. Before those amendments, the SIB, which, ostensibly, is the overall regulatory body, was not able to undertake an investigation of an unauthorised—criminal—concern which was holding itself out as an investment business and possibly defrauding substantial numbers of the public. The SIB is now able to investigate allegations that a business or individual is carrying on an unauthorised investment concern.
I mention that because schedule 5, paragraph 4, to which the amendment applies, says:
The agency must have effective arrangements for the investigation of complaints arising out of the conduct of investment business by authorised persons"—
it does not say "and unauthorised persons"—
or against any recognised self-regulating organisation, professional body, investment exchange or clearing house.
The amendment says:
The arrangements must make provision for the investigation of complaints in respect of authorised persons to be carried out in appropriate cases independent of the agency and those persons.
So the schedule and the amendment insist that the SIB should have effective mechanisms for investigating authorised concerns.
As we have given—rightly—the SIB the power to investigate authorised concerns, surely it should have as effective mechanisms for investigating unauthorised concerns. If it is proper, as the amendment implies, that that can also be done independently of SIB, such an independent body should also have effective measures and means of investigating unauthorised and criminal concerns.

Mr. Butterfill: The hon. Member for Dagenham (Mr. Gould) welcomed the mandatory nature of the amendment, which contrasts with the permissive nature of an earlier matter. However, it seems to me that this is not entirely mandatory, because the mandatory nature is purely that provision should be required to be made, and it depends on what may be an appropriate case. Who will be the judge of what is an appropriate case? Is the SIB to judge whether a case is appropriate for independent


machinery or whether it will carry out the investigation itself? Will that responsibility fall on the Secretary of State? Can the complainant decide what is an appropriate case? The matter is not entirely clear, and I would be grateful if my hon. and learned Friend the Minister would clarify it.

Mr. Cash: I wish to associate myself with the remarks of my hon. Friend the Member for Chichester (Mr. Nelson) in his extremely interesting and useful intervention, which supported many of the points made in Committee. I should like to add a gloss to them.
The arrangements under Lords amendment No. 439 provide for
the investigation of complaints in respect of authorised persons to be carried out in appropriate cases independently of the agency.
That continues the theme which we have, rightly, come back to over and over again during the debate—the importance of an independent assessment.
Paragraph 4 of schedule 5, headed "Investigation of complaints", draws a distinction, which is that
The agency must have effective arrangements for the investigation of complaints
in respect of
authorised persons or against any recognised self-regulating organisation, professional body, investment exchange or clearing house.
Whereas Lords amendment No. 439 deals with independent arrangements in respect of authorised persons, we do not have independent arrangements in respect of the SROs, professional bodies, investment exchanges or clearing houses in the same terms.
Earlier I referred to the possible problem of blackballing within what could be described as a cosy club. I hope that that will never be the case. That could create severe difficulties and an independent investigation would be required into the activities of an SRO. We touched on that matter earlier, and I had an assurance from my hon. and learned Friend, for which I was extremely grateful. That point has not been included in the Lords amendment to paragraph 4. I fall back on the assurance that my hon. and learned Friend has given to deal with this substantial point. If people are to have the confidence that they should have in the SROs, they should know that the independence will be combined with a determination not to blackball people unreasonably.

Mr. Howard: I shall endeavour to deal with the various points raised in this interesting debate. The hon. Member for Dagenham (Mr. Gould) asked about the relationship between this provision and the fact that there is not a similar provision for SROs. The position is, indeed, as he suggested was likely to be the case, that the compulsory requirement for the agency to have an ombudsman system applicable to all authorised persons removes the need for the recognised body to be obliged to set up its own ombudsman system. It is free to do so, if it wishes, as one way of meeting the requirement to have effective arrangements for investigating complaints. The precise way in which the ombudsman scheme would work is a matter for the SIB. It would be for the board to work out the details in relation to the various points that the hon. Gentleman has made.
On the implications of this proposal for the McDonald Wheeler case, I imagine that the hon. Gentleman would,

on reflection, agree that the real answer lies in the compensation arrangements rather than in this provision. It may well be that there would be matters of complaint which could be appropriately investigated by an ombudsman, but the important safeguard for the victims of the McDonald Wheeler case when the Bill's regime is in place lies in the compensation provisions.
11.45 am
My hon. Friend the Member for Chichester (Mr. Nelson) asked about the circumstances in which it would be appropriate for complaints of this nature to be made, and he expressed the concern that in some way the SIB's status and functions would be diluted by the provisions of this independent investigation mechanism. With respect, his concern is unfounded. What is here provided is an additional mechanism within the Bill's structure. If a complaint against an authorised person has made its way up the system and has been investigated by the SIB, but not to the satisfaction of the complainant, there may well be an advantage in having the additional facility of an investigation by an independent body of the type that we are discussing. That would maximise the extent to which a complainant could be satisfied that his complaint was being thoroughly and properly investigated.
My hon. Friend's second point is that these particular provisions are restricted to complaints against authorised persons. It is right that they should be so restricted. This provision relates to the scheme at the heart of the Bill. It is appropiate that the independent mechanism should be restricted to complaints against authorised persons. That is not to say that there will not have to be effective mechanisms for the implementation of the provisions, for which my hon. Friend was to some extent responsible during the passage of the legislation and which extended the ability of the SIB to investigate unauthorised persons. That remains and is not in any way impaired by these provisions. It will be necessary for the SIB to provide an effective mechanism for investigating unauthorised persons. That is one of the matters to be taken into account by the Secretary of State at the time of designation. I do not think that it is necessary for there to be this precise form of independent investigation of complaints against unauthorised persons.

Mr. Nelson: I am grateful to my hon. and learned Friend the Minister for what he has said. He made an important statement. He has said—it certainly does not say this in the legislation—that the SIB will have to have effective measures for investigating unauthorised persons. That is implicit in the amendment that has been passed. I suspect that the matter may have been overlooked as almost a consequential amendment to that amendment, but we should have added in the schedule the investigation of unauthorised as well as authorised persons. As the legislation stands, there is a duty on the SIB to have a mechanism only for investigating authorised persons. I hope that what my hon. and learned Friend has said will be taken note of by SIB.

Mr. Howard: I am not sure that my hon. Friend is correct in that. Clause 92 provides for effective mechanisms to be provided for the investigation of unauthorised persons. That is not dealt with in schedule 5. It is concerned with establishing an independent mechanism for the investigation of authorised persons.


That does not detract from the other provisions. I think that clause 92 will provide my hon. Friend with the answer to his point.
My note of the point raised by my hon. Friend the Member for Bournemouth, West (Mr. Butterfill) is wholly defective, and its significance has escaped my recollection. However, I should be happy to give way to him.

Mr. Butterfill: I am glad to clarify the point. I asked who would be the arbiter.

Mr. Howard: I am much obliged to my hon. Friend. The answer is, of course, the SIB. It would be for it to decide what are the appropriate circumstances in which the independent mechanism is to operate, but the Secretary of State will look at the totality of the rules made by the SIB and at the provision made for that independent mechanism when it comes to the designation process.

Mr. Butterfill: I am grateful to my hon. and learned Friend for that explanation, but is it not a little extraordinary that there should be a mandatory obligation to set up this mechanism, although it then becomes entirely discretionary as to whether it is implemented?

Mr. Howard: That is not an entirely fair construction to make. When the matter was debated in the other place, it was accepted that it would not be desirable to require all complaints to be the subject of such independent investigation. There will be circumstances in which other, equally effective, arrangements can be made. I see no difficulty about leaving it to the SIB, subject to the requirement to satisfy the Secretary of State at the designation stage, to identify those circumstances in which independent investigation is likely to be particularly appropriate and desirable. I hope that I have answered my hon. Friend's point.

Question put and agreed to.

Lords amendments Nos. 440 to 550 agreed to, one with Special Entry.

Schedule 13

TRANSITIONAL PROVISIONS

Lords amendment: No. 551, in page 208, line 36, at end insert——
7A.—(1) Subsection (7) of section 80 of this Act shall not apply to a scheme which is in existence on the date on which this Act is passed if—

(a) the units under the scheme are included in the Official List of The Stock Exchange and have been so included throughout the period of five years ending on the date on which this paragraph comes into force;
(b) the law of the country or territory in which the scheme is established precludes the participants being entitled or the operator being required as mentioned in that subsection; and
(c) throughout the period of five years ending on the date on which the application is made under that section, units under the scheme have in fact been regularly redeemed as mentioned in that subsection or the operator has in fact regularly ensured that participants were able to sell their units as there mentioned.

(2) The grounds for revoking an order made under section 80 of this Act by virtue of this paragraph shall include the ground that it appears to the Secretary of State that since the making of the order units under the scheme have ceased to be regularly redeemed or the operator has ceased regularly to ensure their sale as mentioned in sub-paragraph (1)(c) above.".

Read a Second time.

Mr. Deputy Speaker: With this, it will be convenient to discuss Lords amendment No. 552.

Mr. Tim Smith: I seek some clarification of amendment No. 552, which relates to delegation orders, and is part of the transitional provisions. As we are now dealing with the schedule on transitional provisions, can my hon. and learned Friend say when he thinks that the provisions will come into force, and give the timetable for implementing the Bill?

Mr. Howard: I am happy to respond to the second of my hon. Friend's points. When I have dealt with it, I may well be in a position to deal with his first point. However, the answer to the second point is that the hope and expectation is that the putative designated agency, the SIB, will be in a position to make its application for designation within a relatively short time, and that that application will be duly considered by the Secretary of State. It is hoped that he will be in a position to designate the agency in the early part of next year.
The agency will then have the task of considering applications for recognition by the SROs, which will have been drawing up their rules to provide equivalence with the investor protection given by the rules of the agency. It is a little difficult to judge the precise moment when recognition will be granted, but I very much hope that the final stages of putting the structure contemplated by this legislation into place will be completed in the latter part of next year, so that businesses will be applying for authorisation and will obtain it in that time scale.
Amendment No. 552 enables functions to be transferred before they come into force, so that, for example, it would be possible for the SIB to be made responsible for granting direct authorisations before the requirement to be authorised came into force, thus anticipating that last stage in the structure.

Question put and agreed to.

Lords amendments Nos. 552 and 553 agreed to.

Schedule 14

CONSEQUENTIAL AMENDMENTS

Lords amendment: No. 554, in page 209, line 20, at end insert—
A1. In section 22 of the Charities Act 1960—

(a) subsection (10) shall be omitted; and
(b) in subsection (11) for the words "subsections (9) arid (10)" there shall be substituted the words "Subsection (9)".

A2, In the Trustee Investments Act 1961—

(a) in section 11(3) for the words "the Prevention of Fraud (Investments) Act 1958 or the Prevention of Fraud (Investments) Act (Northern Ireland) 1940" there shall be substituted the words "the Financial Services Act 1986";
(b) for paragraph 3 of Part III of Schedule 1 there shall be substituted—

3. In any units of an authorised unit trust scheme within the meaning of the Financial Services Act 1986";
(c) in paragraph 2(a) of Part IV of Schedule 1 for the words from "a recognised stock exchange" onwards there shall be substituted the words "a recognised investment exchange within the meaning of the Financial Services Act 1986";
(d) in the definition of "securities" in paragraph 4 of Part IV of that Schedule after the word "debentures" there shall be inserted the words "units within paragraph 3 of Part III of this Schedule".
A3. In section 32 of the Clergy Pensions Measure 1961 No. 3—


(a) for paragraph (t) of subsection (1) there shall be substituted—
(t) in any units in any authorised unit trust scheme or a recognised scheme within the meaning of the Financial Services Act 1986"; and
(b) in subsection (5)(a) for the words from "a recognised stock exchange" onwards there shall be substituted the words "a recognised investment exchange within the meaning of the Financial Services Act 1986.".

A4. In the Stock Transfer Act 1963—
(a) for paragraph (e) of section 1(4) there shall be substituted—
(e) units of an authorised unit trust scheme or a recognised scheme within the meaning of the Financial Services Act 1986"; and
(b) in the definition of "securities" in section 4(1) for the words from "unit trust scheme" to "scheme" there shall be substituted the words "collective investment scheme within the meaning of the Financial Services Act 1986".

A5. In the Stock Transfer Act (Northern Ireland) 1963—
(a) for paragraph (e) of section 1(4) there shall be substituted—
(e) units of an authorised unit trust scheme or a recognised scheme within the meaning of the Financial Services Act 1986"; and
(b) in the definition of "securities" in section 4(1) for the words from "unit trust scheme" to "scheme" there shall be substituted the words "collective investment scheme within the meaning of the Financial Services Act 1986".

A6. In section 25 of the Charities Act (Northern Ireland) 1964—

(a) subsection (16) shall be omitted; and
(b) in subsection (17) for the words "Subsection (15) and (16)" there shall be substituted the words "Subsection (15)".

A7. In the Local Authorities' Mutual Investment Trust Act 1968—

(a) in section 1(2) for the words "recognised stock exchange within the meaning of the Prevention of Fraud (Investments) Act 1958" there shall be substituted the words "recognised investment exchange within the meaning of the Financial Services Act 1986"; and
(b) in the definition of "unit trust scheme" in section 2 for the words "Financial Services Act 1986".

A8. In the Local Government Act 1972—
(a) in section 98(1) for the words from "and" onwards there shall be substituted the words "means—
(a) investments falling within any of paragraphs 1 to 6 of Schedule 1 to the Financial Services Act 1986 or, so far as relevant to any of those paragraphs, paragraph 11 of that Schedule; or
(b) rights (whether actual or contingent) in respect of money lent to, or deposited with, any society registered under the Industrial and Provident Societies Act 1965 or any building society within the meaning of the Building Societies Act 1986. "; and
(b) for the definition of "securities" in section 146(2) there shall be substituted—
" securities" has the meaning given in section 98(1) above".
A9. For subsection (1) of section 42 of the Local Government (Scotland) Act 1973 there shall be substituted—
(1) In sections 39 and 41 of this Act "securities" means—

(a) investments falling within any of paragraphs 1 to 6 of Schedule 1 to the Financial Services Act 1986 or, so far as relevant to any of those paragraphs, paragraph 11 of that Schedule; or

(b) rights (whether actual or contingent) in respect of money lent to, or deposited with, any society registered under the Industrial and Provident Societies Act 1965 or any building society within the meaning of the Building Societies Act 1986."

A10. For paragraph 20 of Schedule 1 to the Industry Act 1975 there shall be substituted—
20. Section 52 of the Financial Services Act 1986 (restrictions on advertising) shall not apply to any investment advertisement within the meaning of that section which the Board issue or cause to be issued in the discharge of their functions.

All. For paragraph 20 of Schedule 1 to the Scottish Development Agency Act 1975 there shall be substituted—
20. Section 52 of the Financial Services Act 1986 (restrictions on advertising) shall not apply to any investment advertisement within the meaning of that section which the Agency issue or cause to be issued in the discharge of their functions.
A12. For paragraph 21 of Schedule 1 to the Welsh Development Agency Act 1975 there shall be substituted—
21. Section 52 of the Financial Services Act 1986 (restrictions on advertising) shall not apply to any investment advertisement within the meaning of that section which the Agency issue or cause to be issued in the discharge of their functions.

Mr. Howard: I beg to move, That this House doth agree with the Lords in the said amendment.

Mr. Deputy Speaker: With this, it will be convenient to discuss Lords amendments Nos. 555 to 581.

Mr. Howard: I would have moved the amendment formally, but I seek your indulgence, Mr. Deputy Speaker, as I wish to associate myself with the remarks made by the hon. Member for Dagenham (Mr. Gould) in paying tribute to the part played in this legislative process by those in the other place and by Committee Members, many of whom are in the House today. I am particularly grateful to officials in the Department, who have borne the brunt of this heavy burden of legislation, and who have discharged their responsibilities in a way that goes far beyond the course of duty. I am enormously grateful to them for the assistance that they have given me throughout.

Question put and agreed to.

Lords amendments Nos. 555 to 581 agreed to.

BUSINESS OF THE HOUSE

Ordered,
That, at the sitting on Tuesday 4th November, the Motion in the name of Mr. Secretary Moore relating to the Channel Tunnel Bill may be proceeded with, though opposed, for three hours after is has been entered upon, and if proceedings thereon have not been disposed of at the end of that period, Mr. Speaker shall put the Question on any Amendment which may have been moved, and shall then put forthwith the Question on any other Amendments selected by him which may then be moved, and on the Main Question, or the Main Question, as amended.
That, at the sitting on Wednesday 5th November, the Motion in the name of Mr. Neil Kinnock relating to Agriculture (S.I., 1986, No. 1233) may be proceeded with, though opposed, for one and a half hours after is has been entered upon, and if proceedings thereon have not been disposed of at the end of that period Mr. Speaker shall then put the Question.—[Mr. Sainsbury.]

Cancer Patients (Radiotherapy)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Sainsbury.]

Mr. Teddy Taylor: Although I am happy that the Adjournment debate should have started so unexpectedly early, I am sorry that it means that I shall not be joined, as I had expected to be, by my hon. Friends the Members for Basildon (Mr. Amess), and for Rochford (Dr. Clark) as well as by my right hon. Friend the Member for Castle Point (Sir B. Braine). However, I hope that it means that my hon. Friend the Minister will have a little more time for her other important duties. I know that my hon. Friend the Member for Rochford was flying over from Germany especially for the debate, having thought that it would start later in the day. Obviously, I cannot speak for senior Ministers or attribute views to them, but I think that my hon. Friend the Minister will be aware that my right hon. Friend the Member for Southend, West (Mr. Channon), who is a distinguished member of the Government, has associated himself with this cause by attending a public rally in Southend, where he made a most distinguished and important speech of support. In short, I hope to speak today not just for myself, but for those who represent the area of Southend.
My hon. Friend the Minister will be aware that one of my few claims to fame is that I have been in the House for a long time—more than 20 years, which exceeds a life sentence. I can assure her in all sincerity that during that time I have never encountered an issue that has raised so much genuine alarm, concern and fear in one area as the decision of the North East Thames regional health authority to recommend that the radiotherapy unit at Southend general hospital should be closed, with patients being referred instead to a new centre to be established at Harold Wood hospital. This is not, in any sense, an example of the normal complaint from the unsuccessful area when decisions are made on the location of a Health Service facility, but a case of a substantial and growing area where the inhabitants believe with good reason that they have been consistently discriminated against by the regional health authority and that this final decision on vital cancer treatment services has been made unfairly, unreasonably, irresponsibly and in circumstances that reflect no credit on a vital public service.
If, as seems inevitable, the community health council lodges a formal complaint after the consultation period, the decision will have to be made by the Secretary of State. I should be failing in my duty as a constituency representative if I did not make the Minister aware at this early stage of the sense of outrage in Southend at the region's recommendation and at the circumstances in which the decision was made. This is reflected not only in the greatest campaign ever by the local newspaper, the Evening Echo, but in every section of the Southend community.
The Minister will be aware that the region's reappraisal of its cancer treatment services follows guidance from the Department's standing medical advisory committee which recommended that regional cancer treatment services catering for a population of about a million, with about 3,000 new patient referrals per annum, most of whom

require radiotherapy, should he established because of the medical advantages of the concentration of medical expertise.
The regional authority commissioned Coopers and Lybrand to prepare a report which recommended the establishing of five regional units at Broomfield near Chelmsford, the Royal Free hospital, the Middlesex hospital, St. Bartholomew's hospital and the London hospital with the consequent closure of facilities at a number of hospitals, including Essex County, Southend and Oldchurch. The proposal caused so much concern and alarm throughout the area that the region, after careful and detailed consultations with the health authorities and with hon. Members, agreed to scrap the Broomfield proposal and to propose an alternative of six centres on a basis that inevitably would mean that one unit would fall below the desired 2,000 new patients per year. For example, it was agreed that Colchester should be retained because of the excessive journeys which patients would otherwise be obliged to make. Faced with the alternative of retaining Southend or Oldchurch the region opted for Southend because a major factor in the option appraisal was access to services for Southend residents if a centre were not established there.
On 4 July the Harold Wood option was disregarded because it was felt that the region would not wish to consider providing services on a new site at a large cost. We have a splendid facility in Southend and there is nothing at Harold Wood. However, members of the regional authority considered, for reasons which have never been clear, that there should be yet another reappraisal of the respective merits of Southend and Harold Wood. A detailed report of the final option, dated September, was prepared and in my opinion was a fair and objective summary. It pointed out that if Harold Wood attracted the same 50 per cent. local referrals which Oldchurch had secured it would have no more patients than Southend and that this was guaranteed on the basis of performance.
The report said that if Harold Wood attracted more than 50 per cent. it could have consequences for the already limited viability of Colchester. It said that to build an entirely new hospital would mean putting Southend and Oldchurch on a running down basis for five years which could have a serious effect on staff morale and the services provided to the community on the two sites.
More significantly, the report argued that the Harold Wood option would require expenditure of an additional £4.5 million to duplicate services already provided satisfactorily. The final recommendation seemed clear. If I had been a member of that authority I should have been influenced by what it said. The recommendation states:
Given the high capital cost and uncertain success of the Harold Wood option, and the shortage of capital available to fund many other much needed service improvements in the region, the authority may decide that the Southend option would provide an acceptable pattern of services for cancer patients appropriate to the 1990s and beyond.
Although that recommendation seems clear to me, the regional council disregarded it and chose the Harold Wood option.
Southend residents and the entire staff of the hospital were unable to gather from the public discussion any good reasons why the appointed members of the regional council were prepared to disregard the clear message, the recommendation and the facts put before them. Anger and grave suspicion were added to outrage because before a


final decision was made the Barking and Brentwood health authorty made a public offer of £2 million from future asset sales to reduce the additional costs, subject only to the unit being located in its area. The Minister has a duty to say whether she considers that such an offer or gift, which bears all the hallmarks of a bribe from public money, was a proper or acceptable action by a district health authority appointed by the Secretary of State. Capital receipts belong to the region. The region has a clear policy that £200,000 of every asset sale is provided back to the district. Yet a district health authority offered £2 million.
That offer of a gift by another health authority was bitterly resented in Southend because our district authority has been seriously underfunded by the region for years. In one recent year the shortfall was £7 million. Steps have been taken to reduce that differential by about £300,000 a year and the authority has repeatedly been advised by the region that the underfunding correction has to proceed slowly because none of the other authorities has a penny to spare. Despite that, it seems that one authority is able to pledge £2 million out of the air.
We have often reported the consequences of underfunding to Ministers and my hon. Friend the Minister will be aware from the extensive files that hon. Members such as myself and my right hon. Friend the Member for Castle Point (Sir B. Braine), my hon. Friend the Member for Southend, West and my hon. Friend the Member for Basildon, who has just rushed to get here, as well as my hon. Friend the Member for Rochford, have pressed the Government consistently to agree that something should be done about the underfunding.
The problem can be regarded in various ways, but I ask my hon. Friend the Minister to consider this fact. In Southend, the nursing cover per patient is 16 per cent. lower than the average for the whole region. The region's decision would have catastrophic consequences for morale at Southend hospital and for the comprehensive service that it provides. The general public in Southend are concerned and perplexed about what they see as a further sign of the region's callous disregard for Southend's health interests.
I am grateful to my hon. Friend the Minister for attending the debate, especially as it is taking place earlier than expected, and I ask her for the clearest assurance that she and her colleagues will bear the facts—they are not opinions—in mind when decision time arrives. I ask for a clear assurance that Ministers will visit Southend to meet consultants and representatives of the Southend community before a decision is made. I ask also for a clear assurance that my hon. Friend the Minister will look carefully into the circumstances of the £2 million gift offered by a health authority in the region on condition that the services were located in its area. Will the Minister consider issuing guidance on the propriety of such actions? I should also like a clear assurance that steps will be taken to prevent any regional health authority from discriminating consistently against any area within its region.
This is a vital issue. It is an issue of justice and of fairness which must be approached seriously, urgently and firmly by Ministers charged with the duty of maintaining our health services. I am grateful to the Minister for the careful attention that she has paid to my remarks and I

hope that she can give me at least some of the assurances which I seek on behalf of Southend and areas near that town.

Mr. David Amess: I welcome this opportunity to speak in support of my hon. Friend the Member for Southend, East (Mr. Taylor). I endorse every word that he uttered in introducing the debate. The region has made an extraordinary decision. If anyone cares to examine the matter seriously, he will find that there is no evidence that could have led the region to make such a decision. There is no evidence to support the decision on health grounds, the consideration that most concerns us, and there is no evidence that could justify the decision on financial grounds.
Anyone knows that when someone is told that he has cancer and that there is no treatment for it the traumatic and emotional consequences are extremely distressing. The region's announcement amounts to a sword of Damocles hanging above us, and we want it removed. The local people of Basildon have rallied round and are raising money to build a hospice — the St. Luke's — to treat those who, unfortunately, cannot be cured of cancer. The excellent facility that we have in Southend treats those whom we hope can be saved from cancer.
I tell the House that the Members who represent southeast Essex are united on this issue. I give warning that our constituents sustain us in our view on this matter. We are determined to stop the implementation of the region's proposal. We hope very much that the Government, when they come to the stage at which they have to give their views, will support the Members of south-east Essex.

The Parliamentary Under-Secretary of State for Health and Social Security (Mrs. Edwina Currie): First, I congratulate my hon. Friend the Member for Southend, East (Mr. Taylor) on taking the opportunity to initiate this debate. I am pleased that parliamentary circumstances have allowed us to have a rather fuller discussion than might have been possible. I thank my hon. Friend the Member for Basildon (Mr. Amess) for his remarks and for the effort and energy that he has expended to be in his place to represent his constituents this morning in the light of the changed circumstances of the debate. I appreciate the efforts that have been made by both my hon. Friends. They have represented the interests of their constituents both today and up to this point extremely well, and their constituents are lucky to have them. I am sure that they recognise that. The same can be said of other hon. Members to whom I shall be referring later in my remarks.
I congratulate the Southend Evening Echo on the considerable and detailed interest which it has shown in the proposed changes in Southend. It has given a considered, careful and highly intelligent lead to local people. I have read with great interest the cuttings from the recent editions of the newspaper.
There is no doubt that the issue which my hon. Friend the Member for Southend, East has raised has aroused considerable local interest. Ministers have received personal letters from all the local Members, including my right hon. Friend the Member for Castle Point (Sir B. Braine), my right hon. Friend the Member for Southend, West (Mr. Channon), my hon. Friend the Member for Rochford (Dr. Clark), and my two hon. Friends who are


in their places, my hon. Friends the Members for Southend, East and for Basildon. We have received also over 100 letters from the general public. The Southend Evening Echo, which is running a campaign to save the unit, has held public meetings, issued publicity material and launched a petition to which over 40,000 signatures have been appended so far.
I hope that my hon. Friends will acknowledge the efforts of the regional health authority to keep all local Members informed. I am told that they have received copies of all the relevant documents. I am told also that two meetings have been held with local Members to brief them. I note the assent of my hon. Friend the Member for Southend, East as I say these things. I understand that he told the chairman of the authority recently that he was better briefed on this issue than on almost any other recent issue. Again I note his assent.

Mr. Teddy Taylor: I have no complaint about the way in which we have been kept informed. I think my hon. Friend will be aware that two meetings have taken place, which were extremely helpful. They took place, however, before the Harold Wood proposal was suddenly resurrected after having been rejected.

Mrs. Currie: I am sure that the region will note my hon. Friend's comment and will take it forward. We have the interesting circumstance that a member of my hon. Friend's family is a member of the district health authority.

Mr. Teddy Taylor: My wife.

Mrs. Currie: I suspect, therefore, that we can have a better informed discussion on this topic and on this part of the Health Service in this part of the country than perhaps would be possible in many other circumstances.
I must put on the record an apology to my hon. Friend the Member for Southend, East, who was concerned about the delay in ministerial replies to his parliamentary questions. I quote from the Southend Evening Echo of 22 October, which reports that my hon. Friend was
angry and disappointed by the Minister's attitude.
That was because my right hon. Friend the Secretary of State had been given more than a week to answer questions on the proposed closure of the cancer unit and had not answered in that time. That was my fault. I was not happy with the bland answers that were being offered and I took them back. I take full responsibility for that. I hope that my hon. Friend is satisfied with that explanation. I must apologise to him also for the delay in replying to his letter of 22 September. I have the reply in my hand and he is welcome to it, unless he would like me to take it back to the Department for another few days for redrafting in the light of today's discussion. When we received my hon. Friend's letter there was a backlog of about 1,200 letters at the Department. That is now being cleared very quickly, but some letters, such as that from my hon. Friend, to which I attach great importance, were not being dealt with as quickly as they might have been.
As a Minister, I have to reserve my Department's position subject to consultation on this issue. If the timetable, as I understand it from the region, is followed, decisions will come to Ministers next summer. It is important that I set out that all I can do is to take note of what is being said. I cannot comment or give any opinions. Some aspects of the important details that my hon. Friends have raised will have to lie on the table. All

that I can say about some of the matters to which they have drawn attention is that I shall ensure that the regional health authority's attention is drawn to them and that they are taken into consideration.
I shall set out the timetable as I understand it. A consultative document is to go to the North East Thames regional health authority in December. Any proposal for change will go to the local district health authority at Southend in January. If it goes through the January meeting, it will be the subject of the statutory three months' consultation. It will then be sent back to the regional health authority and be sent onwards to Ministers in about April or May. That is assuming that the consultation process is completed as speedily as it might be. If there is any delay, that process will take longer to complete.
I realise that it might be disappointing to my hon. Friends if I am unable to give an opinion or to come down one way or the other for or against, or even to be neutral, but I have set out the legal position, and it would be a shame if the development of cancer services in Southend and elsewhere were jeopardised by a contradiction of that position.
I thank my hon. Friend the Member for Southend, East for his invitation to visit Southend. My right hon. and hon. Friends and I are doing our best to visit as many of the health authorities and districts as possible. My hon. Friend will be aware that there are over 190 of them. I shall take into account his invitation to visit Southend and I hope that we shall be able to accede to it before too long. I certainly look forward to visiting Southend.
My hon. Friend talked about the proposal from the Barking and Brentwood health authority, and he used the word "bribe". I am sure he realises that it is not necessary to impugn the motives of anyone concerned. The Barking and Brentwood health authority, in the same way as the Southend health authority and the North East Thames regional health authority, is looking for better health for all residents, as well as better health care. We try to run a National Health Service and I am sure that it is in the light of the considerations to which I have referred that the Barking and Brentwood health authority made its offer.
As my hon. Friend rightly said, the capital involved does not belong to the Barking and Brentwood health authority. It belongs to the regional health authority, and that has been the position for as long as I can remember. The North East Thames regional health authority has a policy of pushing decision-making down the administrative structure as far as possible to districts and, if possible, beyond that. That is commendable. A substantial proportion of capital receipts should be allocated to the districts from which the receipts are obtained, so that the districts will have some incentive to realise the receipts.
The region could rescind its decision at any time, however, either in general or in particular. The money belongs to the region, and it is not for the Barking and Brentwood health authority to regard it as its money or to be possessive about it. If the region wanted to take capital money from one district to spend it in another, the region, like any other region, would have an absolute right so to do. It may well take that into account in the plans that it has for cancer therapy.
I am informed that the regional health authority chairman told the region, when the matters were discussed in September, that no consideration was to be given to the proposed allocation of funds from Barking and


Brentwood, and that the decision was not to be influenced by an offer made in respect of a district away from Southend. I have had that assurance from the regional health authority chairman in person this week and I am prepared to accept it, as I hope my hon. Friend will.
My hon. Friend asked why there was so little money to spare for Southend and for RAWP, when suddenly £2 million appeared out of the blue. I am sure he is aware that money has been short in the regional health authority for some time—I shall explain that in a moment—because of the way in which the RAWP formula works. The Barking and Brentwood proposal concerns new money which is to be achieved through receipts from capital sales. In other words, it is in the form of a cheque in the post. The money has not been realised or received. Whatever may have happened to this date is quite unconnected with what may happen from this point onwards if that district health authority or any other is able to achieve an increase in its resources through capital sales. I am sure all hon. Members hope that that will happen.
I think that my hon. Friend may have confused the capital element and the revenue element. The Barking and Brentwood health authority offered capital money. My hon. Friend's concern was the revenue allocation over recent years to Southend. We recognise that concern. As my hon. Friend knows, the RAWP formula is under review and we are taking advice as to whether it is functioning in the way we hoped. I venture a guess that, when it was set up 10 years ago, it all looked a lot easier than it turned out to be. What we have tried to do over the 10-year period is to improve the resource allocation to those parts of the country, mainly outside London, which have been seriously under-funded over a long period. That has meant holding back resources to the four main regional health authorities which cover London, one of which is the North East Thames regional health authority.
This year most of the regional health authorities are close to target. However, it remains the case that the four London regional health authorities are above the RAWP target. The remainder continue to be those authorities outside London. My right hon. Friend recognises the particular problems of London, and this year has allocated additional moneys to the four London regions, which, in the case of two, has taken them further away from the RAWP target. That has become a matter of concern to other regions.
We must consider the RAWP targets with great care and ensure that they continue to reflect not only population movements but different patterns of need, so that we can be sure that people in Trent receive a service comparable with those in Southend and that, if possible, people in the south-west are happy they are receiving the same level of service as people in central London. That cannot be done overnight. It is in the light of those discussions that the funding of Southend and the efforts of the regional health authority to improve that funding can be regarded.
The region tells me that it recognises the under-funding of Southend. As my hon. Friend said, it has attempted to put that right by an additional allocation to Southend of several hundred thousand pounds over and above the direct proportion that it might have had, and intends to continue to do so. I hope that the way in which the matter is recognised will be acceptable.

Dr. M. S. Miller: I am interested in the comments and promises that the hon. Lady has made about cancer therapy. Will she confer with her right hon. Friend the Secretary of State for Education and Science and impress on him the necessity for Britain to maintain an extremely close connection—in fact, to increase the connection — with CERN, the Geneva-based research centre? There could be a connection between what it is doing in particle physics and its understanding of the causation of cancer. I am sure that it would be a profitable and fruitful field if the hon. Lady directed her considerable abilities towards insisting that the British input into CERN remains as it is or is increased.

Mrs. Currie: I am not sure that I have reached cancer therapy services in Southend. I am aware that I have made no promises of any kind. However, 1 take the hon. Gentleman's point seriously about CERN and particle physics. My hon. Friend the Member for Buckingham (Mr. Walden), who is Parliamentary Under-Secretary of State for Education and Science, has taken a close interest in CERN. This year, he has visited most of those departments in Europe which are concerned with it. I am well aware that my right hon. and hon. Friends in the Department take the matter seriously. There is no doubt that improvements in atomic physics and nuclear physics have been one of the main areas of help to cancer patients.
I deplore the way in which the word "nuclear" is increasingly used as a term of pejorative abuse. It is a matter of fact that nuclear physics have helped and have given life to many thousands of people in this country. Not long ago the Derby Evening Telegraph decided to have a scare about radioactive material in Derby and demanded that lists be published of the 70 sources of nuclear radiation in the Derby area. The vast majority of them turned out to be in hospitals treating cancer patients. The issue was then resolved. I take seriously the point that the hon. Gentleman has made and I shall draw it to the attention of my right hon. Friend the Secretary of State for Education and Science.
Radiotherapy is provided at nine hospitals in the North East Thames regional health authority. They include the London hospital, the Middlesex, the North Middlesex, the Royal Free hospital, St. Bartholomew's, and University College in London. The hospitals outside London include the Essex County, Oldchurch, and Southend. Official advice to the Department, which we have accepted, considers that a modern radiotherapy centre should serve a population of about 1 million. North-East Thames has nine centres, for a catchment population of 4·4 million, including about 700,000 patients from North West Thames. One does not, therefore, have to be a mathematical genius to work out that, in the light of departmental advice, North East Thames has too many centres and they are too scattered.
The overall strategy of the regional health authority, as I understand it, is to concentrate radiotherapy in a smaller number of modern centres. The overall strategy was discussed at the May meeting of the regional health authority, and I believe that it was accepted with some enthusiasm. The next question was, which of the various parts of the region should have the new major centres?
I understand that there was some lobbying, including by hon. Members here, for the new regional centres to be in one or two places, including Southend. I may be wrong about that. The broad strategy of the region should be set


against the background of departmental and medical advice of the highest level and against the background of its general acceptance. That was the overall philosophy, and that is what the authority wanted to do.
I propose to leave aside the provision of radiotherapy services in London and concentrate on those in Essex. It is worth remembering that between 5 and 10 per cent. of cancer patients travel from Essex to London units for specialist treatments, including radiotherapy. That is a choice for their GPs and for those involved in their care. We are happy for that to continue.
Patients in the Southend health authority area are served by two units, the Southend hospital and the Rochford hospital, which together form a twin-site district general hospital. It is a major acute hospital with 453 beds and an accident and emergency department. The unit's work is well respected and is of high quality overall. There is no doubt that Southend and Rochford hospitals are held in the highest regard by local people, who have written expressing their confidence in the staff at the cancer unit.
Right hon. and hon. Members have seen the regional strategy documents, and I believe that they have had an opportunity to discuss them. They have seen the departmental advice on the provision of radiotherapy centres. I shall be happy to provide appropriate extracts if it would he of assistance. Perhaps my hon. Friends will let me know.
There has been some misunderstanding about what might happen at Southend. The majority of services for cancer patients will continue to be based at district level, including Southend. These services will include surgery, some chemotherapy, certain other treatments, diagnostic and screening work and, of course, terminal care. Only radiotherapy and other related specialist treatments would require attendance at the proposed regional centres. The regional cancer treatment centres, where radiotherapists, their equipment, and oncologists would be based, are, I understand, intended to provide a high level of medical expertise as locally as possible. The local element is regarded as important, but the removal of radiotherapy facilities from a district should not entail the downgrading of its other cancer treatment facilities.
I understand that, in the case of Southend, in effect only the radiotherapy equipment would be affected, leaving most of the other cancer treatment facilities to continue. Therefore, we hope that the removal of a radiotherapy machine would not substantially affect the provision of these other services. I hope that the regional health authority will take into consideration the fact that radiotherapy is a factor in attracting top quality medical staff to the unit at Southend, and that any change should be so arranged as not to damage the career prospects of the staff concerned.
I make it clear that Southend's cancer unit will not close, as suggested by the Southend Evening Echo. Only radiotherapy and associated facilities are the subject of discussion. The people in Southend have been wrongly informed that all local cancer facilities will cease. It is not the case that the cancer unit will close. I hope that I can make that as clear as possible.

Mr. Teddy Taylor: I note the presence of my right hon. Friend the Member for Southend, West (Mr. Channon). The removal of the radiotherapy treatment will force people to travel about 40 miles. Is the Minister aware of the hardship, inconvenience, pain and distress that would

be caused to the large number of patients who would have to travel this distance? Does she suggest that a unit without radiotherapy treatment would in any sense be a comprehensive treatment unit?

Mrs. Currie: I acknowledge the presence of my right hon. Friend the Member for Southend, West. I am pleased that he is able to represent his constituency in this important matter. I am sure that the regional health authority is taking into account the travel required. I emphasise again that, if Southend people believe that their cancer unit will close, they are incorrect. The only discussion is about the machinery with which the radiotherapy treatment and related facilities are directly associated. Only a small number of staff associated with radiotherapy facilities might be transferred from Southend. The majority of the staff at the cancer unit will remain to provide other services for local patients. As we develop services for local patients, some other work will become so much more important.

Mr. Teddy Taylor: The Minister has been very kind and courteous. Does she seriously suggest that a unit with cancer diagnostic facilities and terminal care but with no treatment facilities is a cancer treatment unit in any sense?

Mrs. Currie: On the contrary, as my hon. Friend will know, radiotherapy is part of cancer treatment. However, it is not the only form of treatment. Surgery and chemotherapy are important, and we expect chemotherapy to become more important in years to come. For a patient receiving treatment for a year or more, radiotherapy may form only a small part of that treatment. It depends on the case and the circumstances.
I hope that my hon. Friend does not in any way denigrate terminal care or long-term care. Some cancer patients may require that for many years when radiotherapy has proved to be unsuitable or no longer satisfactory for them. Radiotherapy is a part of cancer treatment, but by no means all of it. I am sure that the staff who work in other parts of the unit involved in surgery and chemotherapy would want the care that they provide for patients to be taken into account.
As part of the preparation for today's debate I asked whether I could be informed about community services for cancer patients in the Southend area. I am pleased to say that not only will the community services for cancer patients in Southend continue, but that they will be improved under the proposed arrangements. Southend has a private eight-bed hospice supported financially by the district health authority. In Southend there are two home care nurses who provide a similar service to Macmillan nurses. I understand that there are advertisements for a further two nurses, so the service will be doubled. A combined terminal illness care team will be functioning by the end of the year. All those are services for cancer patients, especially for those for whom care has come too late or those for whom an apparent cure at some earlier stage proved to be inadequate.

Dr. M. S. Miller: I apologise for referring to something which the hon. Lady mentioned a few moments ago, but my attention was distracted. I return to the point made by the hon. Member for Southend, East (Mr. Taylor) about the size of the catchment area. I hope that the hon. Lady and her advisers will reconsider that. I accept that nine centres are too many for a population of about 4 million.


However, I do not accept that there should be one radiotherapy centre for 1 million people. We should be able to do a little better than that.
Although the hon. Lady is right in saying that there are many other treatments for cancer, radiotherapy is still applied and will, in all probability, become even better in the future. In my opinion, in areas where there is one centre for 1 million people it may mean that many cancer sufferers will have to travel long distances. The hon. Lady's Department should be considering something better than that, perhaps one centre for 700,000 or 800,000 people—certainly more—than one per million.

Mrs. Currie: The hon. Gentleman speaks from a background of medical knowledge. If he has evidence to support the points that he is making perhaps, he would be kind enough to write to me or to my right hon. Friend the Secretary of State so that we can ensure that full consideration is given to the general points that he has made.
The North East Thames regional health authority's original proposal would have had five centres for 4·4 million people. Its revised proposal now has six centres for 4·4 million people and, should the representations of colleagues from Southend be taken into account, it may well mean seven centres. There comes a point where one simply gets back to nine centres, and I hope the hon. Gentleman will agree that nine centres would be too many. The adequate number is a matter for the regional health authority and my right hon. Friend the Secretary of State in the light of representations made, if necessary, later on.

Mr. Teddy Taylor: I appeal to the Minister to look seriously at the advice that she is being given. Who told her that the Southend hospice is funded by the district health authority? I am the president of the hospice, and I have to engage with my right hon. Friend the Member for Southend, West (Mr. Channon) and my hon. Friend the Member for Basildon (Mr. Amess) in raising vast sums. The hospice is funded, not by the district health authority, but by voluntary donations. Where is the Minister getting the information from? I appeal to her to check on it. We are providing home care services in the hospice because of the disappearance of Macmillan nurses. It is not a district health authority function. We are doing that with voluntary funds, raised by lotteries, functions, sponsored walks up Big Ben—everything under the sun. I appeal to the Minister to check on her sources of information about the Southend hospice. I am president and attend every meeting. I can assure her that it is not funded by the district health authority.

Mrs. Currie: I am grateful to my hon. Friend, who speaks from a position closer to the circumstances than I do. I should like to thank him and all those in Southend who raise money for the hospice, and indeed hospices such as the one mentioned by my hon. Friend the Member for Basildon. There is no doubt that the hospice movement, which grew out of urgent local need and has tapped a source of local generosity and wholeness of spirit, has shown the Health Service how to do things, but my understanding is that some of the money for the hospice — some of the running costs — is found within the district. I am happy to check on that and I shall write to my hon. Friend the Member on that point. However, I am

sure my hon. Friend will accept that the community services for cancer have not been as good as they could have been in Southend, and perhaps as a result of the current discussions the district health authority and the regional health authority are giving attention to that. We should see a substantial improvement within a matter of months. I am sure that my hon. Friend will not only take careful note of that, but will ensure that those promises are fulfilled.

Mr. Amess: May I make two points before the Minister concludes—

Mr. Deputy Speaker (Mr. Ernest Armstrong): Order. The hon. Gentleman must be brief. He cannot make another speech.

Mr. Amess: With regard to radiotherapy treatment, I understand the point about the closure of the Southend unit. I emphasise that for the people in south-east Essex the continuation of radiotherapy treatment is crucial. Some 60 per cent. of cancer patients in Basildon receive radiotherapy treatment at Southend. This is the final thing that I want to ask the Minister. I realise that it is difficult in this debate for her to say anything positive before there has been full consultation, but before any decision is reached will she please ask her right hon. Friend the Secretary of State for Social Services to receive a deputation of south-east Members, obviously including my right hon. Friend the Member for Southend, West (Mr. Channon)—the Secretary of State for Trade and Industry — and my hon. Friend the Member for Southend, East (Mr. Taylor)?

Mrs. Currie: I hear what my hon. Friend says. It has just occurred to me that it might be more useful to wait and see what consideration the regional health authority gives to the representations that are being made. When the consultation document is published and the formal statutory consultation prodedure is undertaken, it may be possible to consider that. I need to take advice on that, as I am sure my hon. Friend will appreciate. I am always glad to meet hon. Friends, particularly those who are making the effort to improve health services in their neigbourhood, and who put to us the case of improving those services. I shall attempt to be as helpful as I can to my right hon. Friend the Member for Southend, West and to my hon. Friends the Members for Southend, East and for Basildon.
I want to ensure that we put it on record today that the radiotherapy unit is not the whole of the cancer unit. The radiotherapy treatment is not the whole of the cancer treatment. I was moved to read the comments in the Evening Echo of 20 October, in which the circumstances of Mr. and Mrs Jim Mullan of Northview Drive, Westcliff were described. I understand that, sadly, they spent seven years watching their daughter Elizabeth Pollard battle against cancer, a battle that she lost in April 1984 at the age of 35. I quote from the newspaper:
Mrs. Mullan … said 'It was hell, but thanks to Southend Hospital centre Elizabeth was allowed to die in dignity and reasonable comfort.
Towards the end she found it difficult to breathe, there was no way she could have travelled for treatment.' 
There is no suggestion whatever that Elizabeth or anyone like her will have to travel for treatment. Hospice care, terminal care, long-term care, surgery, chemotherapy and many other aspects of care for cancer patients for


whom radiotherapy has proved to be ineffective will continue to be provided at Southend in the caring and responsible way in which it has been provided so far. The unit and the treatment that it provides in these areas can continue to command the confidence and, I hope, support of local people for many years to come.
I want to consider the pattern of referrals in the neighbourhood. It has been estimated that at present the radiotherapy unit at Southend attracts some 93 per cent. of local referrals. It also attracts a high proportion of local referrals from the district and patients from Basildon and Thurrock. The unit at Oldchurch has a comparatively low local referral rate. Only about 50 per cent. of patients from Barking, Havering and Brentwood go to that unit; the rest travel to London. No doubt that is a factor in the regional health authority's consideration of where to locate a possible regional centre.
The completion of the M25 has some influence on the area. Those hon. Members with constituencies a great distance from the M25 will be interested to note the major economic and social changes which the completion of this important capital programme will bring to the south-east.
Worries have been raised about travelling to other areas for treatment. I was sad to read an article in the Evening Echo on Tuesday 21 October, which implied that people would not seek treatment elsewhere. The article stated:
Cancer patients will give up and die rather than make the 60-mile round trip for treatment at Harold Wood, a hospital consultant claimed on TV last night.
On BBC's London Plus Southend hospital's Dr. Colin Trasker said: 'There is no doubt people will just give up their treatment and not go.'
Interviewer Antonia Higgs said: 'You mean they'd die sooner rather than make the journey?' Dr. Trasker agreed.
I hope that my hon. Friends will join me in urging all concerned to make use of facilities—especially facilities for cancer patients — wherever and in whatever circumstances these may be provided. I hope that we never discourage patients from seeking the treatment that they need. That may entail travelling to the other ends of the country for treatment for rare conditions. While every effort is made to provide services as locally as possible to the patient, I hope that all concerned with the care, treatment and advice to patients will encourage them to make use of facilities wherever they may be.
It is a fact that 80 per cent. of patients attending the radiotherapy treatment department at Southend travel by car. Generally, patients in Essex drive or are driven to hospital for radiotherapy treatment, rather than use public transport. The ambulance service will continue to be provided for those cancer patients who require it. However, it is worth remembering that many radiotherapy patients are not ill at all and are therefore capable of driving or travelling to the hospital under their own steam.

Dr. M. S. Miller: Does the hon. Lady appreciate how that service works? The service is voluntary and patients sometimes travel as far as 30 miles. More than one patient may be involved in each case and sometimes three or four patients may travel in one car. The first patient to be collected travels in the car for a considerable time in a journey to and from hospital. It might be an idea to examine that service. I speak from personal knowledge, as I had a sister who died of cancer last year. She lived about 30 miles outside London and had to travel to Middlesex hospital. That was a gruelling journey if she was the first to be picked up and the last to be dropped off.

Mrs. Currie: I note the hon. Gentleman's point. I should like to put on record my Department's appreciation of all those people involved as voluntary drivers in that service. It is an important and valuable provision. The ambulance service is available if required and I hope that, where appropriate, it will be used.
I want to mention the details of equipment under consideration in Southend. The current radiotherapy equipment at Southend consists of a linear accelerator, —a Linac—a cobalt machine, a deep X-ray machine, a simulator and a planning computer. The Linac was bought in 1982, at a price of £350,000, and required a further £140,000 to install. The other equipment has been purchased since 1980. I understand that the cobalt machine was a reconditioned unit and may therefore soon reach the end of its useful life.
In preparation for the debate I asked for information on the percentage usage of radiotherapy equipment in Southend. I understand that the number of patients treated there is reasonable and typical for a unit of that size. The expected number of "fields"—single treatments—per day for such equipment is about 30 to 50. Southend's average is 43 for the Linac and 50 for the cobalt machine.
One factor that we must bear in mind is the efficient use of expensive equipment. I am taking advice on how many patients could or should be treated on the more modern equipment now available, especially as more of our patients are still active during the period of their being treated, and therefore have responsibilities to their employers and families. In the recent past capital has been the limitation, with few staffing problems. However, as capital and equipment have become available, some of the limitations have involved the numbers and availability of qualified staff. Some of our discussions now have to take place against a rather different background from that appertaining 10 years ago.
I understand that the region's intention is that the radiotherapy equipment currently at Southend should be transferred to the new regional cancer treatment centres wherever possible. I express no opinion on that; I am merely trying to set out the proposals. The region has advised that it is probable, but not certain, that equipment currently in use at Southend will be transferred to Harold Wood. That will depend on the timing of the prospective closure and development. The proposed radiotherapy unit at Harold Wood will be able to provide up to 3,000 new courses of treatment per annum by virtue of its greater population base. That would meet the requirement for a regional centre. Indeed, we expect that it will attract between 1,700 and 3,000 new courses per annum, depending on whether it establishes itself as a centre for excellence, which I am sure we all hope will be the case. It is then proposed that the Harold Wood centre should be linked with Basildon, Thurrock and Southend districts. I understand that to be the broad basis of the proposal.
I wish to mention other service improvements in Southend that will help not only cancer patients but others. Additional services for patients include a 20-place day hospital for the elderly at Westcliff hospital and an intensive care unit for mentally ill patients at Runwell hospital. As part of caring in the community, there are community care centres on Canvey Island and in Southend for the mentally ill; homes for mentally handicapped people in Benfleet and Shoeburyness; a team of staff, including six nurses, to care for mentally handicapped


people in the community; and a group home for former psychiatric patients in Rochford. There are also planned major developments for Rochford hospital costing £5·5 million to build and £1·1 million a year to run, comprising a rehabilitation department, four wards with 96 beds for the elderly and three day hospitals for the elderly, elderly mentally infirm and the mentally ill. We hope that they will be completed by 1988. I hope that my hon. Friends welcome those improvements and changes, which I am sure they will agree show that the NHS in their constituencies is very much safe with us.
The North East Thames regional health authority is anxious to improve its services for cancer patients. The strategy report that was accepted in May was ambitious and broad ranging. Whatever it decides to do, whatever views the local district health authorities may take, whatever decision the Secretary of State may be asked to take, I am sure my hon. Friends will agree that the objective of the regional health authority is to provide the best possible cancer services for the people whom it is charged to serve with multidisciplinary teams, with a full range of diagnostic equipment, with better links for the local community and with better care for those whose cancers have defeated us.
I hope that all concerned will accept that the regional health authority and the district health authorities are operating from the very highest motives and are concerned only to achieve the best service for all, including those in Southend, Basildon and elsewhere.

Orthopaedic Treatment (Portsmouth)

Mr. Peter Griffiths: I am grateful for this opportunity to discuss orthopaedic treatment in the city of Portsmouth.
It is fortunate that I should be able to raise this issue today as it is only three days since I was able to intervene in an Adjournment debate initiated by my hon. Friend the Member for Romsey and Waterside (Mr. Colvin) on the treatment of kidney patients at another of Portsmouth's hospitals—St. Mary's.
I assure my hon. Friend the Minister that my area is grateful for the way in which the National Health Service operates. The Wessex region is one of growth and development. It has experienced considerable improvements, especially during the past seven or eight years. Only today, my right hon. Friend the Secretary of State for Social Services announced an £8 million expansion programme for hospital development at St. Mary's hospital. The Portsmouth and South East Hampshire district health authority is able to assure local Members of Parliament that it has never been faced with cuts. That is the background against which I want to discuss orthopaedic treatment.
The last issue of Link, the regional health authority's newspaper, said that there was extremely good news in the region. It was that waiting lists for operations had been considerably reduced on the previous year and that the reduction was greater in Wessex than in any other region in the country. That was indeed welcome news and I am sure that the Department, area and district health authorities and medical staff should be congratulated accordingly. It was, however, cold comfort for one group of people—those waiting for orthopaedic treatment at the Queen Alexandra hospital in Portsmouth. The orthopaedic department at the Queen Alexandra hospital is especially successful. It has dealt with local people's needs extremely efficiently. Indeed, it is regarded as one of the most efficient in the country. Although the hospital is relatively new, it has suffered serious water penetration around the operating theatres. This fine hospital complex has some 17 theatres, but no fewer than seven have been affected and been taken out of use at some time. Not all 17 are suitably equipped for orthopaedic patients, however, so about half of the available theatres suitable for orthopaedic patients have been out of operation at some time. As a result, the department has had to concentrate on emergency and traumatic cases, and people awaiting elective surgery, especially hip replacement operations, have had the date of their treatment set back. It is the uncertainty about the dates on which elective surgery can be carried out which is most upsetting to patients. Of course they object to having to wait —almost everyone would like to have at once the operation that is necessary—but a wait can be accepted as long as the operation is performed on the due date. However, to be told that there will be a delay is extremely worrying for patients who are already tense knowing that they are to undergo major surgery.
At one point there were six consecutive weeks during which no elective surgery could be carried out. That is the point to which I wish to draw the Minister's attention. The medical staff and ancillary workers have, without


exaggeration, worked heroically under those circumstances and they have now achieved the point in their operations programme that they would have reached had there not been the six-weeks' delay.
That is remarkable, but it means that the beds available in the wards supporting the orthopaedic department are now full. To quote the words used by an administrator this morning when I checked on the facts, the place is jammed solid. That means that there is a new restricting factor—not just the limitation on the operating theatre space but the availability of beds for patients immediately after undergoing the operation.
That is a matter of grave concern locally. It may be felt that time alone can bring a solution, but that is not true. Last year, when the waiting lists for orthopaedic operations was growing, it was found possible to arrange for hip replacement operations to take place at the private King George's hospital at Midhurst. I am told that this year space is also available at the Lord Mayor Treloar hospital at Alton. Both those hospitals would have space in their operating theatres and accommodation facilites for orthopaedic patients from Portsmouth to have their hip operations.
I am sure that I need not tell my hon. Friend the Minister that the success rate for hip replacements is high. They are a good investment of NHS money and the improvement in the quality of life which a hip replacement can bring about is dramatic.
The problem is that the regional health authority has not found it possible to provide funds this year to continue the programme of passing patients into the private sector, where facilities remain available. That is extremely sad. I understand the pressures on the regional authority. No doubt it is worried about the cost of the work at the Queen Alexandra hospital, although that, after all, is basically a matter for its capital programme rather than its revenue costs.
It cannot be argued that because the operating theatres are out of use for a period there is a financial saving at the district level which could be used to send patients elsewhere. The orthopaedic department remains where it is. The staff are there. There is a need for a once-and-for-all relatively small injection of cash to the regional health authority, specifically and immediately earmarked for one purpose only — for hip replacement operations during the period that we are awaiting the restoration of the full operating capacity of the Queen Alexandra hospital.
I shall not stand up again in 12 months' time and repeat this demand. The cause of the problem is completely outside the control of the NHS. It is a matter of grave concern that doctors and others who are able and willing to carry out the operations simply lack the space in which to do it. Each time the sum, which is as little as £2,500, becomes available an operation can take place. A relatively small sum provided once and once only would allow the orthopaedic department of this highly-regarded hospital to continue to reduce the waiting list for elective surgery.
I hope that my hon. Friend the Minister will feel able to draw this one substantial problem to the attention of our right hon. Friend the Secretary of State, who has shown direct interest in the length of waiting lists. The problem could be solved with a relatively small injection of extra cash. That would bring untold benefits to my constituents and others in the Portsmouth and South-East Hampshire district health authority.

Mr. John Butterfill: I should like briefly to support the remarks of my hon. Friend the Member for Portsmouth, North (Mr. Griffiths) about the importance of orthopaedic treatment in the NHS, especially in the Wessex region. The region has been fortunate in that the revisions in the RAWP formula have improved our previous position. We were worried that too great a proportion of NHS funds seemed to be concentrated in London and that our region did not receive an adequate share of the national resources for the NHS. We hope that the present trend will continue and that any review of RAWP will continue to give the Wessex region a high priority.
The region has a higher than average proportion of elderly and retired people. More than 30 per cent. of my constituents are of retirement age or above. That high proportion of elderly people gives rise to special problems, not least problems affecting the NHS.
Orthopaedic surgery is important in treating the elderly. Too often we become seduced by the high-technology areas of medicine, about which we hear so much in our national newspapers. I fear that some of the London teaching hospitals, which may be more involved in those areas than any others, grab both too much of the headlines and too great a proportion of the cash available, leaving areas such as orthopaedic surgery out in the cold. That is undesirable and unfair because, although nobody would deny that saving life is important, the quality of life is equally, if not more, important. I recollect a member of my family who was terminally ill saying to me that what mattered to him was the quality of life. Certainly for people in Wessex, especially the elderly, it is vital that we ensure that in the latter part of their lives they can enjoy comfort, mobility and freedom from pain.
In those areas orthopaedic surgery can play an important part. Consequently, I hope that my hon. Friend the Minister can confirm that the Wessex region will receive high priority and, if possible, an improved allocation of the national cake, particularly in relation to orthopaedic surgery.

The Parliamentary Under-Secretary of State for Health and Social Security (Mrs. Edwina Currie): I have been asked to respond to the debate.
I congratulate my hon. Friend the Member for Portsmouth, North (Mr. Griffiths) on his assiduity in securing a debate on such an important subject. He will realise from my remarks that the debate is very timely for the Portsmouth area. I know that there are immediate concerns in Portsmouth, particularly over the repairs at the Queen Alexandra hospital. I shall come to that shortly, but I must first thank my hon. Friend the Member for Bournemouth, West (Mr. Butterfill), who put the argument for RAWP very succinctly. We have just debated services in Essex, yet we can see that there is also a need for services in other parts of the country to be improved. My hon. Friend has also shown how RAWP has helped people in those parts of the country that have been underfunded.
I have not yet had an opportunity to visit any of the facilities run by the Health Service in or around Bournemouth, but during the party conference I had an opportunity to visit my uncle who was resident in a home


for physically handicapped people, run by a voluntary agency in Bournemouth. He has been an orthopaedic patient for some time, and is now slowly recovering. I should like to put on record my appreciation of all the staff at the Carlton Dene home in Bournemouth, as they have given my uncle and the other residents there excellent care. I thoroughly enjoyed my visit, and it helped to remind me that we are really talking about individuals in discussing the Health Service.
Great speeches were made at Bournemouth, and I shall come later to the speech made at the conference by my right hon. Friend the Secretary of State for Social Services, but ultimately we are talking about individuals and their families. However, I was pleased to note the remarks made about the area by my hon. Friend the Member for Bournemouth, West.
In this country, orthopaedic services, and particularly waiting times for out-patient appointments and in-patient treatment, were studied in great depth in a report published in 1981, which has become known as the Duthie report. It is the report of a working party chaired by professor R. B. Duthie, Nuffield professor of orthopaedic surgery at Oxford university. I shall therefore take much of the medical information that I have on this important subject from the report.
Orthopaedic surgery is mainly concerned with the repair and reconstruction of the skeletal system. Much of the work used to be mainly concerned with tuberculosis in children. Many of the existing orthopaedic facilities are in old sanatoria that were used for that purpose. But today tuberculosis in children does not cause the orthopaedic problems that it once did, and paediatric work has developed substantially, and is normally found in paediatric specialty facilities, such as children's hospitals.
Thus the problem mainly occurs among people in the older age groups. Among them, the skeletal system fails most drastically, because it suffers from the effects of degenerative diseases of the joints and fractures of weakened long bones such as the femur. The number of elderly people, and the percentage of the population that they represent, has increased over the past few years, and is expected to increase until the end of the 1980s. In the 1970s, the 65 to 74 years age group made the biggest contribution to the rise, but from 1980 onwards the continuing increase in the number of old people has been due to an enlargement in the group aged 75 and over. About one fifth of them are over 85, although the number of those aged 65 to 74 is decreasing slightly.
We estimate that about 3 million people in this country are aged between 75 and 84, and perhaps soon there will be about 750,000 people aged over 85. You and I, Mr. Deputy Speaker, hope, in time, to join them, and we also hope that all the necessary services will be laid on when that time comes. But that change towards a more elderly population has been reflected in the use of orthopaedic beds, and, indeed, of beds in other specialties which treat large numbers of old people. For example, in 1977 the elderly accounted for 5 per cent. more admissions than 10 years before and on average they occupied 11 per cent. more beds. By 1977 about half the available beds were occupied by elderly people and that continues to be so.
In Portsmouth we believe that nearly 70 per cent. of all acute beds are occupied by people aged over 65. The National Health Service is increasingly and substantially

a service for the elderly. The increasing numbers of elderly people treated is a reflection of the success of medical treatments for the younger age groups. Our success breeds its own pattern of demand and we must ensure that we can adapt to it.
The increase in the load of illness and disability placed upon the orthopaedic services by the larger number of old people is only part of the explanation. The availability of new and effective measures to meet some of the needs has led to new demands for orthopaedic services. There is no doubt that the radical changes in the surgical treatment of arthritis which followed upon the development of total hip replacement in the early 1960s has led to an enormous demand for orthopaedic resources. Prior to that date osteotomy and arthrodesis operations had a much more restricted application to arthritis and were particularly unsuitable for elderly patients with advanced conditions of the disease. The total hip replacement is one of the most outstanding surgical advances in recent years. From its early restriction to one or two specialist centres, its use has spread to every orthopaedic unit. Knee and other joint replacements follow much the same course.
I was amused and delighted to read paragraph 3.34 of the Duthie report about a promise made 10 years ago. It states:
In 'The Challenge of Arthritis and Rheumatism"',
a report on problems and progress in health care for rheumatic disorders, which was published in 1977 and edited by Dr. Philip H. N. Wood of the Arthritis and Rheumatism Council's epidemiology research unit at the university of Manchester, it is said:
Hip and knee arthroplasty arc rapidly becoming accepted as standard procedures. No joint is safe from the ravages of the disease though, and much research is being directed to replacement arthroplasties that would help the considerable numbers of patients with damaged shoulder, elbow, ankle and finger joints. Moreover, in polyarthritis it is now possible to undertake programmes of principal joint replacement to restore some degree of independence and activity to patients who previously would have become totally crippled.
I have seen the truth of that promise in my own area. It was a joy to see. The Southern Derbyshire health authority covers six constituencies, including mine. One of my first visits after being appointed Minister was to the Derbyshire royal infirmary's rehabilitation unit in Derby. It was set up in 1973 at the initiative of my right hon. Friend the Member for Leeds, North-East (Sir K. Joseph) when he was Secretary of State for Social Services. The two units have become internationally known.
I saw the full range of diagnostic, surgical and rehabilitation facilities for patients suffering from a variety of chronic conditions, of which arthritis is probably the most well known. I saw occupational therapy, physiotherapy and hand surgery facilities. That specialty is affected equally by the rising numbers of elderly.
I was particularly moved to meet a lady of about my own age who had spent nine years in a wheelchair. She was walking around happily having been repaired in numerous places. She said that she now needed her ankles repairing because after many years of being in a wheelchair they had become weak. Now that she is walking with the aid of only a stick the ankles are showing signs of the degeneration that had necessitated earlier operations. She is now looking forward to having her ankles fixed.
That is a modern miracle but it involves an enormous amount of time, skill and effort. If one joint is affected in a patient, the probablity is that others will be. As skills to


help these patients improve, pressures on orthopaedic facilities increase quite sharply. The number of patients awaiting treatment may change very little, but the number of interventions that can be made per patient may increase sharply. Therefore, the facilities can rapidly become overstretched.
I have seen the work that is being done in conjunction with the Derby royal infirmary at Bretby hall orthopaedic hospital, which is my constituency. There we see, perhaps, part of the answer. The 60 beds at Bretby hall are entirely for planned surgery and are retained only for the purpose in accordance with recommendations made in the Duthie report. Bretby hall is now able to do full hip replacements in an hour and a half in the operating theatre instead of the four or five hours that used to be necessary to perform the operation. Patients go home in 12 days. I am told that that is not quite a record, but it is standard procedure at Bretby hall. I hope that the expertise and skills that go into that sort of speedy and effective use of resources can be examined and perhaps copied elsewhere.
We must be aware that our elderly population my be much more adaptable than we think and may find it much easier to cope with some interventions than perhaps we were ready to give it credit for in the past. On one occasion recently the league of friends at Bretby hall was asked to make money available for a set of Sony Walkmans. The league asked why this equipment was needed and the explanation was that knee joint replacement operations and the replacement of similar joints can be done under local anaesthetic. When this is done the patients are alert and awake and it is quite a noisy procedure. It was therefore suggested that patients might prefer to listen to Elgar or whatever while the operation takes place.
At a later date I visited the hospital and met a number of my constituents, including one elderly lady who had had an operation to replace a knee joint under local anaesthetic. She had thoroughly enjoyed the experience. I asked her whether she had made use of a Sony Walkman, to which she responded with a firm "Of course not". She added, "I wanted to hear what was going on and I asked for a running commentary."
Demand is increasing sharply because the possibilities of successful interventions are increasing. As my hon. Friend the Member for Portsmouth, North has said, over 80 per cent. of these operations are now successful. People are queuing up for them and each patient may find it is not only the most serious joints that can be dealt with. It may be that other joints can be assisted. We might expect that in future patients will come forward several times for work to he done. If the intervention is no longer an unpleasant experience and if, as my elderly constituent suggested, it is becoming an interesting experience, we can expect that demand will continue to increase. On the other hand, my own experience suggests that by judicious use of existing facilities we can ensure that we are able to respond to demand. Indeed, we are determined to do so.
I shall give the House some of the overall figures that will put my general remarks into perspective. The trauma and orthopaedic specialty nationally covers a wide range of work and in 1978 it handled fewer than half a million patients. In that year it dealt with 441,000. By 1985, 527,300 were dealt with by the specialty. That is an increase of 19 per cent. In other words, for every five patients dealt with in 1978, six were dealt with in 1985. In the light of the circumstances that I have described, that is an amazing achievement. In March 1979, the number of

cases on the waiting list was 133,500. By September 1985, the most recent date for which I have figures, the figure was 129,300, representing a 3·2 per cent. fall. In March 1979, there were 13,500 urgent cases on the waiting list. By September 1985, the figure had dropped to 9.623, representing a fall of 14·2 per cent.

Mr. Butterfill: Can my hon. Friend confirm that the waiting list figures would have been considerably better had it not been for the health workers' strike?

Mrs. Currie: Absolutely. I am willing to confirm that. There have been two significant NHS strikes in the past decade—one in 1978 and one in 1982. The 1982 strike had devastating effects on waiting lists. We have endeavoured to recover from that. However, in most specialities we have not only recovered from 1982 but, as in the cases I have described, we are now showing a considerable improvement, even on the 1978–79 figures. We have not finished yet. The estimated waiting time, in median terms, in 1979 was 13 weeks. In 1984, it was 12 weeks. The figure has been sticky. It has not dropped in the way we should have liked.
The first hip replacements were done in the late 1940s. I was reminded recently, after I made an injudicious comment that they were unknown 20 years ago— they were very much known 20 years ago — that the most effective ones were beginning to be done about 38 years ago. In 1978, the number of hip replacements stood at about 28,000. In 1983, the figure was 37,000 and, in 1984, it was 38,000. My hon. Friends will be aware of the promise made by my right hon. Friend the Secretary of State during his speech at Bournemouth in which he said:
We have raised that number to 38,000 today. But I aim to do more. By 1990 I want to see that number approaching 50,000.
A figure of 50,000 would be almost double that which existed about 12 years ago. We are determined to achieve that objective. In 1978, the waiting time for hip replacements was about 23 weeks. After the NHS strike in that year, the waiting time rose to 25 weeks. By 1983, we had got it back down to 24 weeks. It is still at that level nationally. Obviously, the figure Varies a great deal. The target time for non-emergency treatment is one year. Nationally, on average, the hip replacement programme is within that target.
I hope that my hon. Friend the Member for Bournemouth, West will bear with me if I direct much of my attention to the Queen Alexandra hospital in Portsmouth. I listened with great care to what my hon. Friend the Member for Portsmouth, North said. Much of what he said was right. I suspect that in his position I should have used much stronger language. The major part of the Queen Alexandra hospital was completed eight years ago, although there has been a hospital on the site since 1908. The new hospital was built by John Laing. Two major repair jobs have had to be undertaken, and that has had a drastic effect on patient services. All 14 of the main operating theatres closed for five weeks from 11 August so that badly defective concrete floors could be replaced. It is estimated that the repairs will cost £200,000. The theatres are on two floors in two groups of seven. It was hoped to open some operating theatres on the bottom floor while later work continued above. Only six other main theatres are available for use—five at St. Mary's hospital, which is the other district general hospital, and one at Gosport war memorial hospital.
About 600 non-urgent operations were delayed, and only essential surgery was possible. The possibility of using two neighbouring private hospitals on an agency basis was explored. I am glad to report that since these events began the hospital dealt with all emergency and trauma cases without any problems. There was not a problem for emergency work or for anyone brought in off the street, but there was a continuing serious problem for all planned work.
The defective floors were laid about 10 years ago by subcontractors to John Laing which have since gone out of business. Talks are continuing between John Laing and the Wessex regional health authority, and the legal implications are being considered. My hon. Friend will understand if I say very little more on that matter.
In addition, as my hon. Friend mentioned, 75 beds on the top floor of the hospital have been put out of commission for three months because of extensive water damage to the hospital's flat roof. Repairs will cost an estimated £300,000. The flat roof construction of the hospital was a recommended technique for all major public buildings when Queen Alexandra hospital was designed. However, the method has been discontinued. The life expectancy of such flat roofing appears to be about 10 years. The regional health authority considers that there is no liability on the part of the contractor.
Those of us involved with the National Health Service and with other public building matters, such as municipal housing, in that period might well have wished that flat roofs were banned a long time ago. But they were not; they now are. We have to pick up the tab for the repairs that should have been unnecessary. The circumstances in Portsmouth fully bear out my hon. Friend's remarks.
Work on the first major repairs began in August and will not be completed until February 1987. My Department accepts that this is unfortunate. It is essentially a matter for the relevant health authorities to resolve, but Ministers are taking a close interest, as we are concerned about the effect on patient services. We are assured that the decision to close the beds and to reduce surgical services was not taken lightly. The health authorities concerned have been making every effort to ensure that the impact on patient care is kept to a minimum.
For the purpose of the debate, I checked the current situation. I shall endeavour to give my hon. Friend as much informatin as I can. The 14 theatres were indeed closed, as I mentioned. Seven theatres were opened on 22 September.I understand that five of these theatres are available for orthopaedic work. The total in-patient waiting list on 1 April 1986 was 1,136. By 30 September 1986 it had risen to 1,403. However, I am told that only 11·6 per cent. of patients waited for more than a year. It is worth reflecting that the equivalent figure for the rest of the country is about 30 per cent. Although there has been a substantial diminution in services, Portsmouth, until that date, had received a relatively better service than many other parts of the country. I am sure the people of Portsmouth appreciate that and indeed have come to expect it, as, of course, is their right.
Last year some hip replacements were done privately at the King Edward hospital at Midhurst. At least one orthopaedic surgeon has been trying to persuade the health authority to release more money for hip

replacements to be done at Midhurst, where a good service was provided for local people. Another orthopaedic consultant has let us know that his waiting list has grown so fast that he cannot take on any more people for elective surgery, which is a very sad reflection on the circumstances in Portsmouth. I am told that that consultant is immensely hard-working and does as much as might be expected of him and that his patients respect and appreciate his work. We are conscious of the accuracy of my hon. Friend's remarks.
In June, the Portsmouth health authority asked the Wessex regional health authority for extra non-recurring revenue so that hip replacements could be contracted out to the private sector. I understand that at that time the answer was no. The authority asked again in September and has put it on the agenda for its district review in December. The authority also said that it was prepared to forgo for two years capital money that it has allocated to other services to reduce hip replacement waiting lists. We appreciate the efforts made by this district health authority to come to grips with the problem. I hope that it will not be necessary to damage or postpone plans for other services. However, if that is the only way we will be able to improve the waiting lists for hip replacements, it is for the district health authority, in consultation with the regional health authority, to decide what it wants to do.
I mentioned that the debate is very timely. My hon. Friend the Member for Portsmouth, North may not be aware of the fact that the district general manager is meeting clinicians on Monday 3 November to consider a possible reorganisation of orthopaedic surgery, with a view to expanding in-house facilities. Serious and urgent consideration is being given to the ways in which existing facilities could be utilised in order to get waiting lists down.
The health authority is looking at doubling day surgery facilities when the next stage of repairs is complete. Given the remarks I made earlier about the changes in anaesthesia and the techniques of orthopaedic surgery, it may be possible to do more of the work on a day basis and release other resources for more serious cases in orthopaedics or possibly for cases in some other specialties, which may otherwise have to wait if orthopaedics is to be advanced. The possibility of expanding day surgery is very worthwhile.
My hon. Friends will know that nationally the number of day surgery cases has doubled in the past six years and now about one million cases each year are being attended to in that way. I have had treatment of that kind. It is nice to be able to go home when one has finished, provided that adequate arrangements are being made at home to prepare for the patient and that that is what the patient wants to do. It is marvellous to think that people may have full hip replacements and major joint operations that turn them from complete cripples into walking people in a matter of weeks and that it may be possible, subject to the most stringent controls over the assessment of the patients, for them to get some of the work done on a day basis and be able to pop in from time to time to get the next bit done. That would be an adequate use of resources.
I hope that what I have said has shown sufficiently that we are taking the problems being put to us by colleagues in Portsmouth very seriously. It is a serious matter. In my judgment, it should not have happened. The problems we face with this building now require to be put right properly. It is no good simply wringing our hands over


what has happened in the past. An eormous amount of money, nearly £500,000, is now being spent on putting those construction problems right. We are assured that the region and the district are taking seriously the effect that that has had on waiting lists, especially in orthopaedics, and that every effort is now being made to get to grips with the problem. I am confident that, within a short time, efforts will have been made, and I hope that funds are found locally, to ensure that the waiting lists can now be reduced.
In orthopaedics we have a service that never used to exist and was not possible and we have a pattern of disability among a section of the population that never used to be a problem because few people reached such old age. We now have both. It is a challenge to the Health Service which my right hon. Friend the Secretary of State, other Ministers and those whom we have appointed to the district and health authorities are taking seriously. I am grateful to my hon. Friend the Member for Portsmouth, North for giving us this opportunity to discuss these matters.

London Ambulance Service

Mr. Nigel Spearing: I wish to raise aspects of the London Ambulance Service. I am grateful to the Minister for being here at this time. We haw this practice of airing grievances before the Adjournment and my grievance is deep. Although I appreciate the Minister's presence, I make no apology for raising this matter because I do not think that she understands — I hope that she will by the time I have finished—the extent of the inconvenience and distress being caused by heir Department and its works to thousands of people in London and to the employees of the London Ambulance Service, as well as the knock-on effects on doctors, outpatient departments and families throughout the metropolis.
In reply to earlier debates, the hon. Lady properly stressed the nature and concern of care and, in particular, the effect upon the individual. On several occasions she has reminded us of happy outcomes and marvellous things that the Health Service is doing. I am afraid that she will have little scope for that in her reply to what I have lo say today because I believe that there has been a major sequence of maladminstration in the Health Service, which has caused a great deal of submerged unhappiness. I look to her to put it right. If she is concerned to achieve happy outcomes such as she has cited, I hope that she and her senior colleagues will do something about the matter that I now raise.
The North East Thames region has featured in a previous Adjournment debate, and my constituency of Newham is in it. We have our own district health authority, which is subject to the regional health authority. However, as the hon. Lady and others may know, the London Ambulance Service is run on an agency basis by the South West Thames regional authority for all the authorities in London. That causes an administrative layer and difficulties that might not appear elsewhere, but I fear that what has happened in London is happening elsewhere, although in London the administrative knock-on effect may be greater because of that structure. I should prefer the London Ambulance Service to be responsible to an all-London elected body but, alas, the Government have not regarded that and the service was removed from the care of the Greater London Council some time ago.
When we think of ambulances, we think of the emergency ambulances rushing through the streets, perhaps with a case aboard, and we drive to the side of the road to let them by. However, two to three times the amount of mileage is done on non-emergency services, carrying people who have to attend outpatient clinics and calling for them at their homes. Most often those people are not on stretchers. Sometimes they are in wheelchairs, but sometimes they are classified as ambulatory. It is to those non-emergency services in London and elswhere that I refer exclusively today.
In 1983 the Government established a Rayner-style departmental survey of the service. Under the guidance of the chairman of the East Birmingham health authority, Mr. James Ackers, the assistant district administrator, Mr. B. R. Payne, reported in March 1984. It was a long report and I do not intend to quote from it at length. The upshot was that Mr. Payne believed that there was some misuse of non-emergency ambulance services by people who


might have walked. The letter that I shall read later talks about people getting to the hospital by other means rather than being carried by those expensive services.
In addition, there was some administrative slippage in the service, and Mr. Payne thought that a link between those who paid for it, particularly the district health authority, and those who used it, would lead to greater efficiency, although in his report he said that he thought that the extent of misuse was no more than 4 to 10 per cent. Of course, one man's idea of misuse may be another man's idea of non-misuse—it is a variable term.
Mr. Payne's calculations showed that there could be a saving in expenditure of about £9·4 million. The Secretary of State said in a letter dated 17 March 1984:
The report identifies as the major weakness in the control of the non-emergency service the fact that those DHAs which do not have the responsibilty of managing it are able to make demands on it without direct and immediate financial consequences to themselves. The main recommendation is that the ambulance service should provide a given quantity of service to each DHA at an agreed cost and the DHA should develop a means of including an agreed element in unit or clinical budgets for patient transport. It would be open to districts to buy in part of the service from other public agencies or the private sector if this was more cost-effective, providing the quality of the service was maintained.
I emphasise those final words. In the middle of his statement, the Secretary of State used a deterministic phrase when he said that the service
should provide a given quantity of service to each DHA".
In other words, the superior authority will decide how much is to be provided and that will be that unless very stretched financial resources are used for buying in more services. That is administration from above and, I put it to the Minister, a dreadful mistake. The important question is how much will be provided. In London, there is a considerable cut.
On 3 June, I asked the Minister's predecessor:
What requests have been made by the South-West Thames regional health authority to district health authorities in respect of the use of the London ambulance service; what is the target of that authority's request for redirection in the number of 'non-emergency' cases to be carried?
He replied:
In a letter dated 20 March 1986, the South-West Thames regional health authority asked district health authorities to reduce the demand for non-emergency ambulance transport for walking cases by 40 per cent."—[Official Report, 3 June 1986; Vol. 98, c. 540.]
That is an extraordinary figure — 40 per cent. of one category of patients were no longer to be carried by the London Ambulance Service. In fairness, I must stress that it was not 40 per cent. of all non-emergency cases but 40 per cent. ambulatory non-emergency cases—people who might be considered able to walk or to get to hospital by other means. But who decides that?
I have been in correspondence with the chairman of the South West Thames regional health authority — Sir Antony Driver—to clarify that draconian cut. I shall quote from his letter because it is fair and instructive to do so. He explained that the patients who were carried and regarded as walking patients were only a proportion of non-emergency cases. On his calculations, the reduction was nearer 12 to 15 per cent. of overall non-emergency cases than the 40 per cent. figure which he had previously given. He said:
The further complication in using figures such as those which you quote"—

—the Minister's figures, not mine—
is that the demand level for non-emergency transport is very much a matter of clinical decision, and in the past it is the unfortunate truth that doctors have not been as critical in examining the need for expensive ambulance transport compared with other forms as they might have been, and it is only now, during the period when the service has been unable to fulfil all the demands, that they have been required to be more critical. It is our earnest wish that the Ambulance Service continues to carry all patients for whom ambulance transport is clinically essential.
That is Whitehallese, "Yes, Minister" stuff. I wish to do a little exegesis on that bureaucratic letter. The chairman admits that the health authority has not been able to fulfil all the demands. That happened, of course, because of the cut of 40 per cent. in walking cases required by the Minister and, in turn, by the regional health authority.
The chairman said in his letter that doctors had not been so critical in examining the need for expensive ambulance transport as compared with other forms. What does he mean by "other forms"? Does he expect people literally to walk to hospital, to use the bus for outpatient treatment or to ask friends with cars to give them a lift? Those alternatives may be possible for many people. Doctors would not have expected ambulances for those people, but I understand that in a high proportion of non-emergency cases ambulances are requested by doctors.
What about the phrase "clinically essential" used by the chairman? I would have thought that a caring society and a caring NHS would have preferred either "clinically desirable" or "clinically advisable". We all know that even when in the best of health, on an off day we do not feel too good. Elderly people should not have to find their own way to hospital; it is far better that an ambulance be provided. The Minister has referred to the high proportion of elderly people in the nation. A high proportion of non-emergency ambulance cases are elderly or disabled people.
The 40 per cent. cut has been defended by the chairman, so the hapless district authorities or other regional authorities that rely on him to provide ambulance services must follow suit.
In practice, difficulties can be even greater than I have described. Even given a certain amount of increased efficiency in the handling of ambulances—which was fairly pointed out in the Rayner-style report—difficulties will arise. For example, there will be traffic problems, delays, difficulties with grouping people, waiting for people to leave outpatients, and so on. Theoretical mathematical calculations do not always work out.
In the north- east Thames ambulance division in March this year there were up to 200 cancellations a day, amounting to between 600 and 700 cancellations a week. I understand that in Newham general hospital, which is already 70 per cent. oversubscribed for its emergency services, there was about a 20 per cent. cancellation rate. The effect of that is considerable and the difficulties for the doctors and the outpatients can only be imagined. People wait for the ambulance, but do not know whether it will arrive. I understand that up to 12 cancellations were made for one of my constituents, and many hundreds of them had their appointments cancelled. Anyone who has used the appointment system in an outpatients department knows how complex it is to obtain one. Imagine then sitting waiting for an ambulance that does not arrive.
In north-east London during the last few months, and especially in Newham, the rate of cancellations has


reached alarming and unacceptable proportions, especially for the elderly. Let us consider the difficulties for their families, who want to know whether they have been able to attend for their appointments and whether they can get home again. In many cases patients have been delayed when trying to get home. I have even heard of cases where, because ambulances were not available, the hospital staff—out of the goodness of their hearts—have obtained minicab services, no doubt at extra cost to the NHS.
The Minister has made it plain that she understands the problem. The cumulative anxiety of those wishing to go to hospital, their relatives who may be at work and the people who try to help out is enormous. The Government have created an administrative knock-on effect on an enormous scale. They talk of a caring Health Service, but it is unquestionable that there is a serious effect on family life, on out-patient departments and on the morale of the people who operate the service. The latter are subjected to questioning and abuse when patients arrive. They are expected to be proficient but are not given the tools or manpower to do the job. It is almost impossible to quantify the social disease that that process engenders. All hon. Members will appreciate that point from experience of their own communities.
On 3 June, I asked the then Parliamentary Under-Secretary of State, the hon. Member for Wycombe (Mr. Whitney), some questions and received almost unbelievable replies. He said that in 1985 the London Ambulance Service ran nearly 3·7 million ambulance miles for emergencies and 7·7 million ambulance miles for non-emergency services. I have been told by people who use a wheelchair that ambulances without a tail-lift often arrive to collect them. The projection for 1986 is that emergency miles should remain much the same at 3·8 million but that non-emergency miles should be reduced to 6 million as a direct result of the Rayner study and the Minister's letter. That is a reduction of 1·7 million miles per year, or more than 20 per cent.
The consequences of the reduction in terms of human impact are mind boggling. Is the Minister suggesting that needs have fallen by anything like that amount or that there is that much misuse of the service? Like all other hon. Members, I as a taxpayer am prepared to ensure that, even if there is 10 per cent. misuse of the service, the other 90 per cent. should get the service that they need and on time. Hospital workers can then provide an efficient service. Goodness knows, they are under enough pressure as it is. The Rayner study is an irregular form of administrative study. By Government fiat, originating with the Prime Minister, after one letter from the Minister and one investigation by one assistant administrator in one health authority, we now have chaos and distress affecting a large number of people in London.
The hon. Lady has told us that she is a caring Minister. This is a short notice debate and I am grateful for her presence, but we look to her to give an undertaking to examine this matter. I do not believe that this caring Health Service and its caring Ministers can prove their point until we get back something like the 1·7 million ambulance miles that have been lost to the people of London.

Sir Bernard Braine: I must apologise to you. Mr. Deputy Speaker, to my hon. Friend the Minister and to the House for not being here when my hon. Friend

the Member for Southend, East (Mr. Taylor) was unexpectedly called to make his Adjournment debate speech. I shall be all the briefer because the hon. Member for Newham, South (Mr. Spearing) has since raised an important issue and is entitled to an answer before we rise.
The matter raised by my hon. Friend the Member for Southend, East touches on his constituency, mine and others. It concerns the provision of radiotherapy and cancer treatment services for a very large number of our people. I shall not go over the ground again because I have no doubt that it has been covered most adequately. I merely wish to reinforce the plea that I know will have been made against the regional health authority's proposals for the relocation of the first-class long-established and highly reputable cancer services at Southend.
The regional health authority has had three attempts at moving the goal posts to Chelmsford, Runfold and Harold Wood and has not come up with any real solution to the problem. It has not taken into account the terrible distress caused to cancer patients in our constituencies who have to travel considerable distances for treatment two or three times a week. The regional health authority's proposals have caused not only widespread dismay but great anger throughout south-east Essex. It is unbelievable that its proposals do not save money, but will, in fact, cost more.
I have written to my hon. Friend the Minister in detail about the matter and will do so again, but I simply want to state here and now that the NHS exists in order to deal with sick people as efficiently and humanely as resources permit. Instead, the regional health authority has caused immense distress and anxiety. It has taken over a year to arrive at a proposal that satisfied no one. I do not mean just ordinary lay people such as myself and my constituents and cancer sufferers and their relatives; I mean the Essex medical committee and the consultants caring for patients. I hope that my hon. Friend will lake this expression of deep dissatisfaction seriously and will take a personal interest in the matter with a view to ensuring that when my right hon. Friend the Secretary of State comes to make a decision he is fully informed.

The Parliamentary Under-Secretary of State for Health and Social Security (Mrs. Edwina Currie): I know that my right hon. Friend the Member for Castle Point (Sir B. Braine) must be disappointed at the way that the systems of the House operated today so that he could not be present for what I hope, on reading the Official Report tomorrow, he will agree was a useful and timely debate. I know that he had made representations to Ministers and the regional health authority and has effectively represented his constituents' worries on this matter, and I am sure that he will continue to do so. I hope that he will take note of what was said this morning and I shall be pleased to hear his further comments. I am grateful to him for supporting his constituents in the way that he has today.
The hon. Member for Newham, South (Mr. Spearing), as he said, has asked questions on the London Ambulance Service and he is not alone in that. For example, questions have been put down by the hon. Member for Peckham (Ms. Harman), and on 18 May 1986 my hon. Friend the Member for Ravensbourne (Mr. Hunt) had an


[The Parliamentary Under-Secretary of State for Health and Adjournment debate on the subject which the hon. Gentleman can find, should he so wish, at columns 956 to 962 of the Official Report for that day.
The British ambulance service has been the subject of much scrutiny and change recently, partly, as the hon. Gentleman said, as a result of the Rayner scrutiny, which appeared some years ago. Most recently, the pay structures have been changed and the pattern of working of the service has been altered.
The salary structure agreement for ambulancemen came into effect on 1 March 1986 and it radically changed the pay arrangements for ambulancemen. It provided an opportunity for all ambulance services to rid themselves of inefficient working practices. It was intended that the changes would lead to a more efficient and effective ambulance service more sensitively geared in terms of staff deployment to patients' needs.
The agreement was reached in the ambulance Whitley council and was warmly welcomed at the time by all parties. I have recently had the opportunity to meet some of the members of the trade unions concerned at that time and to thank them for the immense amount of effort that went into negotiating that agreement and its subsequent implementation. All the details are not yet worked out. For example, ambulance officers are still the subject of some discussion. However, my Department would wish me to put on record the fact that we appreciate the enormous effort that went into negotiating that agreement by all concerned, not least by the trade unions.
There was no intention that the level of service provided to the general public should be reduced as a consequence of the agreement. The purpose of the salary structure was to replace a pay system which encouraged inefficient working practice. Both management and the trade unions recognised the importance of reducing overtime to the absolute minimum necessary for operational purposes and the need to eradicate other working practices which frustrated the establishment of a modern, cost-effective, efficient ambulance service.
The inclusive salary will replace the former pay system in which the basic rate of pay was substantially enhanced by additional payments for overtime, shift and weekend working. It also subsumed bonus payments previously paid to many services, but not to the London Ambulance Service. Overtime levels in the London Ambulance Service in the previous year, however, equated to 488 full-time equivalent staff, or about 20,000 hours a week.
I hope that the hon. Gentleman will join me in deploring any system which relies so heavily on overtime to pay people a decent wage and which so destroys the opportunity that others may have of joining the service when so much of the service is provided on an overtime basis. He and I share concerns about young people who seek jobs and sometimes cannot find them. I hope that we can be reassured that the ambulance service at least and, indeed, many other parts of the NHS are doing their bit to ensure that we have more names on the payroll while we get the work done as efficiently as possible.

Mr. Spearing: The Minister may well be right and, obviously, we want the service properly staffed, with proper wages and a career structure, but that was not the burden of my remarks. Is the Minister suggesting that the talks or difficulties that she mentioned have in any way

influenced the 40 per cent. cut in ambulant cases or the administrative instructions? She will agree that, although they are interesting, they are irrelevant.

Mrs. Currie: On the contrary, they are directly relevant. I hope that the hon. Gentleman will bear with me as I attempt to put the case as I see it and in such a way that the background can be fully explained.
The basic rate of payment now covers all payments of a standard working week, work round the clock and seven days a week as required. The national agreement also provided local management with the opportunity to review critically working arrangements in a number of areas. For example, the level of accident and emergency cover was to be reviewed to ensure that the level provided matched that indicated by operational need. You will see, Mr. Deputy Speaker, that in one sentence I have answered the hon. Gentleman's point.
Provision was also made for rotas to be reviewed and, where necessary, changed, using the criterion that operational necessity is the basis for staff being on duty, and operational necessity alone. Out-patient and day-centre arrangements were also to be reviewed and altered to provide optimum vehicle and manpower utilisation. The agreement further provided for a commitment for working practices to be kept under continuing review and for changes to be made where indicated. It also provided for the extended training of ambulance men and women and for them to practise extended skills without further payment.
The basic management principle on which the salary structure was based was carefully worked out with specialist experts. The expectation was that salaried status would lead to major changes in the organisation and delivery of ambulance services and to an improved service for those patients who needed it. However, it was realised that the full benefits of the agreement would take time to materialise, and that the pace of change would be variable across the country and depended critically on the ability of management to secure these changes. It is not surprising that there were teething troubles in some areas and it cannot be denied that there were and perhaps still are particular problems in London.
Prior to the introduction of the salary structure in March, the London Ambulance Service management reviewed its working arrangements and reached local agreement with the staff about the changes necessary to provide the level of service that it considered appropriate.
It decided that there was an immediate need to improve the quality of the emergency ambulance service in London. Changes were therefore introduced on 1 March simultaneously with the introduction of the salaried structure. More resources were diverted into the emergency side of the ambulance service, and these have helped to improve response and activation times, producing a better emergency service for patients. Clearly, that was a worthwhile development, and I hope that the hon. Gentleman can welcome it.
September is the latest date for which I have been able to obtain figures, but I understand that then the nationally recommended response times were met in 90 per cent. of emergency cases in London, as against about 85 per cent. previously. But that is still below the minimum standard of 95 per cent. that is set down nationally.
Consequently, we expect to see further improvement. The improvement in the emergency service had an


immediate impact, however, on the volume of non-emergency ambulance services in London. That occurred because the manpower available to carry out non-emergency duties was temporarily reduced and new staff needed to be recruited and trained. That led to major problems during March and April, and a considerable number of complaints resulted.
Since then, however, the situation has improved considerably. The full benefit of additional staff will not yet have been felt, because of holiday absentees, but during October we hope that the full impact should have become apparent and we are assured that within the next few weeks a large number of staff who are full-time, part-time and training will come on stream. The London Ambulance Service is particularly recruiting part-time staff to cover day hospital work, which will in time release full-time staff to deal with out-patient work. Thus positive measures have been taken to improve the undeniably difficult situation that existed earlier in the year.
I hope that the hon. Gentleman will agree that the most important thing is to ensure that the ambulance service is being used effectively. It is not a taxi service, or a free bus service. It is quite inappropriate that skilled personnel and expensive equipment should be used in anything but the way in which they were intended.
The hon. Gentleman spoke about ambulant non-emergencies. Surely he agrees that a substantial proportion of ambulant non-emergencies should be able to reach the care that they require without the assistance of the ambulance service, whether they are going to the hospital, day centre, clinic or a GP's surgery. The hon. Gentleman should address himself to that principle.

Mr. Spearing: I did.

Mrs. Currie: I am sure that the hon. Gentleman can find it in himself to accept the general principle that equipment should be used for the purpose for which it is provided.
He mentioned the mileage being covered. I refer him to a written answer given on 24 July 1986 and to volume No. 102 of the Official Report, columns 445 to 446. The hon. Member for Peckham asked what mileage was covered by ambulances run by the London Ambulance Service in the South-East Thames region in 1985. She also asked for the estimate for 1986. She was told that in 1985 the emergency service mileage amounted to 808,687 miles. The estimated mileage in 1986 was put at 838,000 miles. That is an increase of about 30,000 miles a year. The non-emergency mileage in 1985 was estimated to be 2,029,105. We estimate that the non-emergency service should provide around 1·6 million miles. In other words, there is quite a substantial drop of about 400,000 miles a year. Those figures are for the south-east division of the London Ambulance Service, which follows the south-east Thames boundary but includes Croydon.
Such figures confirm what the hon. Gentleman was saying. But in his reply to the debate on 15 May 1986, which was raised by my hon. Friend the Member for Ravensbourne, my predecessor said:
The London Ambulance Service management has reviewed its working arrangements and reached local agreement with the staff about the changes necessary to provide the level of service it considers appropriate. It decided that there was a need to divert more resources to the

emergency side of the ambulance service … I believe that it will be welcomed by all hon. Members."—[Official Report, 15 May 1986; Vol. 97, c. 960.]
That is what was intended, and that is what has happened.
In my response on 24 September 1986 to a letter from the hon. Member for Peckham dated 18 July I was able to update the training figures. I told the hon. Lady:
As you will know, the South West Thames Regional Health Authority (which manages the LAS on behalf of the four Thames regions) acknowledged that problems had arisen on the non-emergency service and began taking positive measures immediately to overcome these difficulties. Their urgent measure to recruit and train additional staff has succeeded in providing over 140 additional ambulance personnel since March for non-emergency work. These people are already operational, and 80 more are now in training.
I am advised that we now have 150 additional full-time staff on non-emergency work with 21 part-timers and about 60 personnel in training.
In my letter to the hon. Member for Peckham I continued:
The Region has also opened up the recruitment possibilities by seeking up to 300 extra part-time staff to deal with day hospital demand so that full-time staff can be released to carry out important out-patient work. Coupled with this, the Region's actions have allowed more staff to be available for the life-or-death emergency work to ensure that standards are improved in this vital area of the service. I feel that the Regional Health Authority deserves congratulations for the effective and speedy improvements they have made to staffing problems in just a few months.
A report in The Guardian of 27 October confirms some of the events. It says that the London Ambulance Service is carrying 30 per cent. fewer non-emergency patients today than it was two years ago. It says that only 27,500 patient journeys per week were being made this year compared with 39,500 in 1984. About 10,500 fewer walking patients were being transported—a reduction of 44 per cent. I am more than happy at that development. We are keen to have a better emergency service. We are determined to ensure that the equipment and resources are not used inappropriately.
The hon. Member for Newham, South said that he would like the LAS to be run by an all-London elected body. I assume that he would have liked the GLC to run the service. Once again Socialist Members are crying over spilt milk, because the GLC has been abolished. However, in its 20 years no attempt was made by any Government to reorganise in that way. The chance was there, but it was not taken. The GLC is no longer there and the ambulance service will not be run as the hon. Gentleman prefers. The hon. Gentleman is at a dead end. I am satisfied that the ambulance service is being run and managed in the interests of patients.
The hon. Gentleman is right to express worries, but it is also right for the Government to ensure that regional health authorities and those managing the ambulance service can guarantee the efficient use of skills and equipment. The ambulance service is part of health care. It is not a taxi or a bus service. It is no more acceptable for an ambulance to be used inappropriately than it is for an operating theatre to be used inappropriately. I am sure that the regional health authority and the London Ambulance Service are taking careful note of the points that have been made, and I am grateful to the hon. Gentleman for raising them this afternoon.
Question put and agreed to.
Adjourned accordingly at nineteen minutes past Two o'clock.